Shares of Caterpillar Inc. /zigman2/quotes/203434128/composite CAT -0.97% rallied 1.2% in premarket trading, to bounce of an eight-month closing low in the previous session, after the construction and mining equipment got a bullish endorsement from Cowen analyst Matt Elkott, who said he believes the next "megacycle" is underway. Elkott started coverage of Caterpillar's stock with an outperform rating and price target of $241, which implies 28% upside from Wednesday's closing price. Elkott expects Caterpillar to show revenue growth, gross and operating margin expansion and earnings-per-share increases for three consecutive years, the first period of "megacycle" growth the company has enjoyed in 14 years, and only the second in modern history. "We see potential for incremental revenue opportunities of $35 billion for [Caterpillar] from autonomous solutions in the next 10 years," Elkott wrote in a note to clients. "We estimate that at least 75% of CAT's markets will work to reduce emissions. We expect strong growth in services, organically and via acquisition." The stock, which closed Wednesday at the lowest price since Feb. 1, has lost 10.7% over the past three months while the Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA -1.34% has slipped 1.6%.