Investing

The 2014 DJIA Bull and Bear Case: Boeing, Verizon, Coke, JPMorgan, Pfizer and More

We are now well  past the end of 2013, and many strategists have mixed targets for the stock and bond markets in 2014. The last year brought gains of 26.5% in the Dow Jones Industrial Average and even better gains of 29.6% for the S&P 500 Index. 24/7 Wall St. wants to know what lies ahead for these key stocks in 2014.

A first observance is that the gains seen late in 2013 may have eaten away at some of the gains that could have been made in 2014. Valuations have caught up, and now the pressure is on for companies to keep performing. January also brings a year-end earnings season that will dictate the outlook for 2014 from most major companies.

After creating a bullish and bearish case for almost every single DJIA stock in 2014, we wanted to highlight the expected winners for 2014. We also then have highlighted links to our reviews of each DJIA stock and some of the key S&P 500 stocks with an outlook for 2014 as well.

The top expected gainer for the DJIA in 2014 is The Boeing Co. (NYSE: BA) according to analysts, who are predicting price gains of almost 10% without considering the dividend. We would caution readers that Boeing shares were up a sharp 84% in 2013. Verizon Communications Inc. (NYSE: VZ) was another surprise expected winner in 2014, with analysts calling for gains of almost 10% outside of the dividend. Its pressure from Sprint and T-Mobile is monumental, plus the yield greatly lags AT&T. Verizon’s biggest gain is due to the expected earnings boost after the Vodafone stake purchase of Verizon Wireless.

Another expected gain is a surprise – Coca-Cola Company (NYSE: KO), despite all of its sugar-water problems. Coca-Cola is expected to have gains of almost 9% in 2014 outside of its dividend, and its gain in 2013 was 17%. Another surprise expected winner for 2014 is J.P. Morgan Chase & Co. (NYSE: JPM). The bank with the fortress balance sheet is still fighting billions in fines and it gained over 36% in 2013. The expected gain in 2014 is about 8.4% outside of its dividend. The last surprise expected top gainer for 2014 was drug giant Pfizer Inc. (NYSE: PFE) after returning 26% in 2013, with an expected gain of almost 8%. Pfizer has been restructuring, it has the same patent cliff of other pharma stocks, and its prospects ahead are not likely full of major growth metrics.

Again, we have outlined what is nearly a full DJIA bull and bear case for 2014. These DJIA stocks have been covered for full reviews, and the expected return listed is linked to the full review of each and that gain does not generally include the dividend yield this year. They are as follows (not including dividends):

As we tallied everything up, there were 8 of the 30 DJIA stocks where the consensus analyst price targets were actually under the stock price as of the end of 2013. That is nearly unprecedented, which made the consensus average DJIA expected stock gain (before dividends) only about 3.2% for 2014. Five DJIA stocks were not given detailed reviews because of lower volume and interest.

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