Analysts are resoundingly bullish about the prospects for stocks under Trump. Analysts see 25 of the 30 stocks in the Dow being higher in 18 months than they are now. If analysts' price targets prove correct they imply the Dow will be trading for 20,024 in 18 months, which would be a 5.3% increase from where the key market measure is now.
Apple is the stock that could have an outsized impact, since shares are trading for $112 a share and the Dow gives greatest weight to the stocks with the highest per-share prices. Shares of Apple have lagged this year, rising just 6.5%. Tech stocks, in general, haven't been greater performers since the election given that they rely so much on foreign manufacturing and several tech CEOs have been vocal critics of Trump. Trump has talked tough about cracking down on overseas production, which is another hurdle for tech companies.
But analysts still think Apple shares will be worth $132 a share in 18 months, which would be 18% upside. Investors have been largely focused on the negatives on a Trump presidency on tech stocks, says Scott Kessler, analyst at CFRA. But that has created buying opportunities across the (tech) sector, especially centered on large-caps," Kessler says, adding tech companies could benefit from Trump's lower proposed tax rates. "We see a stronger U.S. economy and less regulation as good for bigger technology companies." Intel (INTC) is another tech company analysts are bullish on, calling for the computer chipmaker's shares to rise 11% to $39.42 in 18 months.
Analysts also think Nike could be an MVP as the Dow surges higher. Shares of the athletic apparel maker are down 18% this year to $51.28 on concerns about the stronger dollar, which makes U.s. exports more expensive in addition to a slowdown in the Chinese economy. But analysts see Nike being the best stock in the Dow, rising 22% over the next 18 months, to $62.71 a share. Nike's size gives it a competitive advantage against its rivals like
Certainly, there are risks for stocks that cannot be glossed over by glowing price targets. The strong and surging dollar creates a big headwind for U.S. multinational companies that rely on exports. Sluggish growth in emerging markets is also a global economic depressant. Rising interest rates could also boost borrowing costs.
But Dow 19,000 is a reality. Investors can only hope that 20,000 happens, too.
DOW STOCKS WITH BIGGEST UPSIDE
Analysts see eight stocks in the Dow rising 8% or more over the next 18 months
Company, symbol, Tuesday price, % upside to analysts' 18-month target
NIKE, NKE, 51.24, 22.4%
Pfizer, PFE, 31.85, 18.4%
Apple, AAPL, 112.06, 18.0%
Visa, V, 81.49, 15.6%
The Home Depot, HD, 128.91, 13.9%
Coca-Cola, KO, 41.62, 11.9%
Intel, INTC, 35.45, 11.2%
Source: S&P Global Market Intelligence, USA TODAY