The Dow’s Big Gainers — How High Can They Go?

The stock market had its best September since the days of Franklin Delano Roosevelt.  Investors are wondering whether the good times will last.  The answer, according to Wall Street analysts, is a qualified yes.

Wall Street analysts expect five of the biggest gainers in the Dow Jones Industrial Average, all of whom have had double-digit gains, to continue to appreciate in price.  The widely followed index is up 2.9 percent though today its trading down.

Whether these gains will last is anybody’s guess.   Unemployment continues to hover over 9 percent and the real estate market continues to bump along the bottom.  Retail sales are expected to gain 2.5 percent this year, an improvement over a 2.5 percent decline in 2009.  Sales of existing homes rose 4.3 percent in August.

As always, its important to remember that past performance does guarantees of future returns.  A good September does not mean anything for the rest of the year.   Indeed, Bloomberg News reports that “estimates for S&P 500 companies’ combined 2011 profit fell as low as $95.17 last month from an August high of $96.16 and posted the first quarterly reduction since the three months ended June 2009.”

Here is a look at the top performers.

EI Du Pont de Nemours (NYSE: DD) has been on a roll this year as sales rose while prices for raw materials fell.  Shares have gained about 45.68 percent this year and trade around $44.57.  Targets average $48.15 with a high of $54. It was the top gainer among the widely followed stock market index

Caterpillar Inc.  (NYSE: CAT) gained more than 35 percent so far this year as investors bet that gains in the company’s overseas business would off-set sluggish U.S. demand.   Shares trade at $77.26 with median target prices at $82.33.  The high target is $99.

McDonald’s Corp.  (NYSE: MCD) has been one of the few success stories of the Great Recession. Diners have been avoiding casual restaurants in favor of he home of the Golden Arches.  The shares, which have gained more than 31.4 percent this year, trade around $75.  Targets average $80.06 with a high of $90.

Continued delays of the 787 Dreamliner has soured many investors on Boeing Co.  (NYSE: BA).    Perhaps Wall Street believes the aerospace company has suffered enough.  Shares are up more than 22.6 percent this year even though its latest earnings report was disappointing.  Shares trade around $66.42.  Prices targets average $82.25 with a high of $100.

Shares of Kraft Inc. (NYSE: KFT) are up more than 19 percent this year, as investors bet that Warren Buffett, a major shareholder, was wrong about the Cadbury Plc. acquisition.  Even in these tough economic times,  consumers are reluctant to part with their Oreo cookies and Kraft macaroni and cheese.

–Jonathan Berr