Dow Jones stocks Boeing (BA), UnitedHealth (UNH), Caterpillar (CAT), Chevron (CVX) and Goldman Sachs (GS) is in the spotlight this week.
The Dow Jones Industrial Average recently hit a seven-month high, leading the current market rally. Although comprised of only 30 stocks, the Dow Jones index reflects broader strength in industrial, financial, medical and energy stocks.
All five of these Dow stocks are near buy points, with some potentially moving.
The overall market bullish trend made progress last week, with the S&P 500 retracing its 200-day moving average, holding that key level on Friday despite a hot jobs report.
Chevron stock is on the IBD Leaderboard. Boeing shares are available on SwingTrader.
Dow Jones Stocks: Boeing
BA shares rose 4% to 182.87 in Friday trading, slightly above a 173.95 cup base buy point. Investors can use recent short-term highs as an alternative entry. Boeing shares rose 2.5% for the week.
Boeing shares rose again on Friday after the Wall Street Journal report United Airlines (UAL) is close to a deal to buy “dozens” of 787 Dreamliners.
After a big rally, Boeing shares have stalled over the past few weeks, allowing the 21-day moving average to close.
Boeing’s shares began to rise again in late September. That was cut short by the latest reversal on Oct. 26, as Boeing posted an unexpected third-quarter loss as defense segment woes offset gains in commercial aviation.
But in early November, Boeing said it expects to deliver about 375 of its best-selling 737 in 2022, rising from 400 to 450 next year. By 2025-26, Boeing is forecasting about 800 commercial deliveries, including the 737 and 787 Dreamliner. In October, Boeing said it delivered 277 737 jets and 9 787s.
All those future jet sales will contribute to stronger cash flow in the coming years, Boeing said.
Boeing’s best-selling 737 Max jet has returned to service in December 2020 after two deadly crashes caused worldwide grounding. Deliveries of the 787 resumed last quarter after production issues. Aircraft manufacturers receive the bulk of payment from airlines and other customers after the planes are delivered.
Boeing has suffered from a slump in commercial and business air travel during the pandemic. It also faced setbacks in major defense programs. The company is working on a turnaround as recession fears mount and supply disruptions continue.
Analysts expect Boeing to earn 32 cents per share in the fourth quarter, compared with a loss of 7.69 per share a year ago. Wall Street expects revenue to rise 34% to $19.8 billion.
Boeing is expected to turn a profit in 2023 after four years of losses.
The Dow Jones Composite Score of Boeing is 47. It has a Relative Strength Rating of 93, an exclusive IBD Stock Check measure of stock price volatility. EPS rating is low 1.
CAT shares rose 0.2% to 236.13 on Friday, up 0.2% for the week.
According to MarketSmith analysis, shares are suspended around the 238 buy point, which is still valid from a cup base through April. Investors can use 239.95 as another buy point, either as a high handle for the seven-month cup base, or as a traditional handle for a larger consolidation starting in June 2021.
The Dow Jones Industrial Average has gained 46% since the end of September. The six-week run — including an 8% jump in the third quarter — has been breathing since Nov. 14, when it traded in a tight range.
The Deerfield, Illinois-based construction and mining equipment giant easily beat earnings estimates on Oct. 27. The company reported EPS up 48% to $3.95. Revenue rose 20% to $14.9 billion.
The Street is forecasting fourth-quarter earnings per share to rise 48% to $3.97, with sales up 14% to $15.8 billion.
Caterpillar stock was IBD’s top stock on Thursday. Wednesday, a heavy equipment manufacturer Titan Machines ( TITN ) rose 26% after beating earnings and revenue views with third-quarter 2023 results.
Including other heavy equipment names Deere (DE), Cummins (CMI) and United Leases (URI) is also showing signs of strength in the current market.
With the global economy potentially sliding into recession in 2023, the timing for CAT stock to make a big move seems odd. Even in the soft landing, residential construction is tanking, accounting for 25% of Caterpillar’s construction industry sales.
The Dow Jones Stock CAT has an IBD Composite Rating of 94. It has a relative power rating of 93 and an EPS rating of 85.
Shares of UNH traded down 0.1% on Friday, ending at 536.16. Shares fell 0.3% for the week. This weekly move includes Wednesday’s 3.7% gain, a pullback from the 21-day and 50-day lines on heavy volume.
As of Friday’s close, UNH stock has a flat base with a 558.20 buy point next to the previous handle glass.
Investors can buy UnitedHealth stock above Thursday’s high of 553. There are many trades in this area, including the previous 553.29 buy point.
Healthcare plays, including UnitedHealth stock, continue to stall as they become more insulated from inflationary pressures. UNH shares have outperformed the broader market for long periods in 2022.
UnitedHealth’s business model aims to contain healthcare costs for its managed care arm, in part by providing healthcare services at its cost-effective locations. UnitedHealthcare, the health insurance arm of UNH, is the largest membership-based health insurance company in the country.
Minnetonka, Minn.-based UnitedHealth also posted solid third-quarter earnings. The managed care giant raised its earnings forecast on Oct. 14 after beating earnings estimates for the third quarter.
UnitedHealth’s earnings rose 28% to $5.79 a share, the second straight quarter of accelerating growth. Revenue rose nearly 12% to $80.894 billion.
Analysts expect fourth-quarter EPS to rise 32% to $5.90. Sales are forecast to rise 12% to $82.3 billion, according to FactSet.
In terms of ratings, UNH stock is ranked second in the Medical Managed Care industry Humana (HUM).
Dow Jones stocks are up 99 to 93. It has a relative power rating of 85. The EPS rating of the stock is 94.
Dow Jones Stocks: Chevron
Shares of CVX fell 0.8% to 181.03 on Friday, just below the 182.50 buy point and just below the 21-day line. For the week, Chevron is down about 1.45%. CVX shares have been trading around that official buy point all month.
Crude oil prices had dipped again but rebounded last week amid a series of headwinds.
Crude oil futures initially felt some pressure as the White House eased oil sanctions on Venezuela. This will allow Chevron to resume oil production in the Latin American country for at least six months.
But signs that China will ease its Covid policies helped push crude prices higher. Meanwhile, it is possible that OPEC+, a cartel that includes Russia, could announce oil production cuts at their meeting on Sunday.
In late October, Chevron topped third-quarter earnings reviews. Chevron reported EPS up 88% to $5.56. Third-quarter sales rose 59% to $66.6 billion.
Wall Street expects fourth-quarter earnings to rise 76% to $4.51 per share. Revenue is forecast to rise 18% to $56.6 billion, according to FactSet.
California-based Chevron ranks ninth in IBD’s Oil & Gas Integrated industry group. CVX stock has a Composite Rating of 94 and a Relative Strength Rating of 94. Furthermore, it has an EPS Rating of 79.
Goldman Sachs shares
GS shares fell 0.8% to 380.58 on Friday. Shares fell 2.1% for the week. The investment bank has a 389.68 buy point from a 35%-deep cup-with-handle base to November 2021.
Investors could also see the latest break as a shelf just above the buy range from the bottom base that Goldman shares cleared in early November.
The 21-day moving average has almost caught up, and the 50-day line has started to gain ground. The relative strength line is at a multi-year high, reflecting the outperformance of GS stock relative to the S&P 500.
On Oct. 18, Goldman beat earnings estimates with its third-quarter results. The investment bank and financial services firm reported a 44% drop to $8.25 per share as revenue fell 12% year over year to $11.98 billion.
Goldman Sachs’ investment banking revenue fell 57% to $1.58 billion for the year as the company saw significant declines in corporate lending, financial advisory and underwriting revenue. But Global Markets revenue rose 11% to $6.2 billion, driven by growth in the Fixed Income, Currencies and Commodities (FICC) segment.
FICC sales increased 44% to $3.53 billion due to significant growth in income across interest rate products, currencies, commodities and credit products. However, Goldman noted a significant decline in mortgage revenues, but saw growth in financing and mortgage lending revenues.
Analysts expect Q4 EPS to fall 32% to $7.36 and revenue to fall 10% to $11.3 billion.
The Dow Jones stock ranks third in the Goldman Sachs Banks-Money Center industry group. GS has a Composite Rating of 86. It has a Relative Strength Rating of 89 and an EPS Rating of 58.
Follow Kit Norton on Twitter @KitNorton for more coverage.
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