Ahead of the Bell: Bucyrus, Joy Global upgraded

HARTFORD, Conn. (AP) — Mining equipment makers Bucyrus International Inc. and Joy Global Inc. could benefit from gradual improvements in the global economy or rising commodity prices, an analyst said Tuesday.

KeyBanc Capital Markets analyst Jeffrey D. Hammond upgraded the two companies to "Buy" from "Hold."

"Despite widespread expectations for a slow recovery and a general sense of caution stemming from the speed of demand destruction over the past nine months, we believe evidence exists to suggest a gradually improving outlook, as the negative rate-of-change in the economy appears to be decelerating," he wrote in a note to investors.

"Impressive mine production discipline" and increasing demand should result in dwindling stockpiles and rising prices, he said.

"As that occurs, mines should begin to redeploy idled equipment," Hammond said.

The aftermarket parts and service revenue of Bucyrus International and Joy Global will likely benefit next year and machine orders could follow late in 2010 or 2011, he said.

Hammond maintained his share price targets of $40 for Bucyrus and $48 for Joy Global.

He also maintained his 2009 and 2010 profit estimates for both companies.