The mining equipment market will grow next year boosting Caterpillar’s business, according to one Wall Street firm.

UBS raised its rating for Caterpillar shares to buy from neutral, citing positive results from the firm’s survey of the industry’s spending plans. The stock rose 2 percent to a record high after the UBS report.

We upgrade Caterpillar “to reflect our new evidence that a continuation of the earnings upcycle is ahead and that CAT’s growing cash position will drive upside to earnings and returns as it gets deployed,” analyst Steven Fisher wrote in a note to clients Monday. “Our UBS Evidence Lab Macro analysis suggests a re-acceleration of US private construction activity, and our UBS Evidence Lab survey indicates that mining capex should continue to improve in 2018.”

Fisher raised his Caterpillar price target to $140 from $116, representing 15 percent upside from Friday’s close.

The analyst cited the firm’s survey of 50 mining companies, which revealed 60 percent of firms intend to spend more next year for new mining equipment.

“UBS equipment rental surveys remain positive for business conditions and pricing,” he wrote.

As a result, Fisher raised his 2018 earnings per share estimate for Caterpillar to $7.50 from $5.90. He also forecasts the company will generate nearly $10 billion of cash flow in total after capital expenditures and dividends from 2018 to 2020.

Caterpillar stock is up 31 percent year to date through Friday versus the S&P 500’s 12 percent return.

— CNBC’s Michael Bloom contributed to this story.