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How the Dow Will Add Another 1,000 Points: Part 2

Monday, 21 May 2007 | 6:57 PM ET

All week Cramer is focusing on his prediction that the Dow Jones Industrial Average should hit 14,548 by the end of the year. He’s breaking down the index, component by component, to find the 1,000-point upside it needs to hit his target – and find some good plays for Home Gamers.

Alcoa is up 30% already this year, and Cramer’s expecting the almost $39 stock to hit $45 by the end of the year. The company made a hostile bid for Canadian rival Alcan, but there’s a chance the combined firm could roll up under Companhia Vale do Rio Doce before long, Cramer says, hence the potential $6 jump in share price.

Altria isn’t where it should be, at least as far as Cramer’s concerned. Now that Kraft is gone, he thinks the company will be split into domestic and international divisions, one offering a great yield and the other a growth company. The two pieces should trade up to $86 combined and yield 4%, pre-split.

American Express may be up only 5% this year, but that’s because the stock just can’t keep up with the growth spurred by CEO Ken Chenault, Cramer says. It’s behind Mastercard in valuation, but he doesn’t think catching up will be a problem.

Finally, there’s Boeing, which is still riding high on the aerospace bull market as airlines refinance their balance sheets and buy more planes. Cramer thought BA would hit $100, but with such strong growth in earnings $105 seems more likely, he says.

Bottom Line: Alcoa, Altria, American Express, AIG, AT&T, and Boeing – They’ve all got enough upside to be worth owning, and we’ve still got four more days of the Dow to go through.

Questions? Comments? madmoney@cnbc.com

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