Now that 2017 is over and 2018 has arrived, investors have to contemplate what to expect ahead. After all, this raging bull market is now nearing nine years old, and it has been the strongest bull market that most investors have ever seen. The Dow Jones Industrial Average (DJIA) rose 25% and the S&P 500 rose by almost 19.5% in 2017. Wall Street is by and large calling for tax reform, earnings growth and higher gross domestic product growth to continue the stock market gains in 2018.

24/7 Wall St. just came out with its annualized forecasting tool showing that DJIA at 26,400 and at least 2,855 on the S&P 500 are the baseline targets for 2018. For the Dow to make its targets, Caterpillar Inc. (NYSE: CAT) is going to have to do its part.

As far as what other strategists are calling for in the broader market, Credit Suisse is now targeting 3,000 and Oppenheimer is targeting 2,900 for the S&P 500 in 2018. At the end of 2017, the forward valuation for the S&P 500 Index was 18.5 times earnings to 19.0 times expected earnings per share according to two main sources.

Caterpillar was the Dow’s second-best performing stock of 2017, with a share price increase of 70%. The stock closed 2017 at $157.58, above the 12-month consensus price target of $148.55. The company’s annual dividend is $3.12 and the dividend yield is around 2%.

The company’s total return in 2017 rang in at 73.2%, and the share price is up five-fold since the depths of the Great Recession. Caterpillar benefited from a better global economy last year. Machinery orders rose and the company should get a further boost from the recent changes to U.S. tax laws. Because U.S. companies can now expense certain capital purchases and a proposal to spend big on the nation’s infrastructure is reportedly on its way from the president’s desk, Caterpillar’s outlook for 2018 remains generally bright.

But the company remains involved in a major dispute with the U.S. Internal Revenue Service over how it accounts for overseas profits. The company runs virtually all sales and profits through a Swiss subsidiary and pays an effective tax rate as low as 4%, according to a report in The Wall Street Journal. Caterpillar has followed this practice since 1999, but if it loses to the IRS, its back tax bill could be as much as $2 billion.

Caterpillar has a 52-week trading range of $90.34 to $159.39 and a market cap of $93 billion. Its weighting in the Dow is 4.36%, and it ranks roughly 61st among the S&P 500.

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