Dow Jones 40,000 is a milestone investors have eyed for years. But now a handful of stocks are posed to make it a reality.
Eight Dow stocks, including UnitedHealth, Boeing and Microsoft, are each expected to add at least 150 Dow points in the next 12 months, says an Investor's Business Daily analysis of stocks from S&P Global Market Intelligence and MarketSurge. Those are the largest contributions predicted from any Dow stocks, analysts say.
Dow 40,000 would be just the latest punctuation on a big rally. "Markets are rallying with the S&P 500, Dow Jones Industrial Average and Nasdaq Composite indices all reaching all-time highs," said Jose Torres, senior economist at Interactive Brokers.
Dow 40,000 A Long Time Coming
All told, analysts actually think the Dow is going to blow way past Dow 40,000 in 12 months time. If all 30 stocks in the average do what's expected, the Dow will be worth 42,233.32 in 12 months. That's roughly 7% higher than it closed on Friday. But there are clearly some stocks pulling more than their fair share of weight.
The idea of Dow 40,000 started the minute the average closed at 30,000 back on November 2020. But talk about a rocky road.
The Covid outbreak, skyrocketing short-term interest rates and tech-stock crash delayed Dow 40K from happening. But now, it looks like just a matter of time. The Dow Jones Industrial Average is up nearly 5% this year.
UnitedHealth: The Top Dow Driver
Health care company, UnitedHealth, is the Dow stock analysts have the highest hopes for. Analysts suspect the stock will rally nearly 20% in the next 12 months.
If right, that would mean the stock will add nearly 642 Dow points to the average. That's more than any other stock in the index. And it's not just wild speculation. The company is expected to earn 27.79 a share in 2024. That's up nearly 11% from 2023. But the anticipated rally hasn't started yet. Shares of UnitedHealth are down 6% this year so far.
The same can't be said for Microsoft, another hopeful for a big Dow point contribution. Shares are already up 14% this year. And analysts think the AI giant's shares will gain another 9% in the next 12 months. If that's right, it would mean an addition of 245 Dow points.
Nothing Is For Sure, Though
With the Dow closing at 39,476 on Friday, it's not much of a stretch to call for 40,000. It's only 1.3% away. But disappointments happen.
Consider Boeing. The struggling aircraft maker is supposedly going to rally more than 34% in 12 months. And if that happens, it would add 425 points to the Dow, making it the No. 2 largest contributor. And yet, the shares are down more than 27% this year instead. Analysts think the company will swing to a profit in 2024, but last year was such a huge money-losing disappointment, who knows what's next?
But for now, analysts seem confident calling for Dow 40,000. And it's hard to dispute it.
Biggest Contributors To Dow 40,000
Based on analysts' 12-month forecasts
| Company | Ticker | Dow points gain expected | YTD expected % rally |
|---|---|---|---|
| UnitedHealth Group | 641.78 | 19.9% | |
| Boeing | 425.24 | 34.3% | |
| McDonald's | 283.75 | 15.3% | |
| Microsoft | 245.48 | 8.7% | |
| Amgen | 182.21 | 10.1% | |
| Apple | 181.12 | 16.0% | |
| Amazon.com | 173.35 | 14.8% | |
| Salesforce | 151.50 | 7.5% |
