Digging Through the Dow

People just don’t believe Cramer when he says he thinks the Dow Jones Industrial Average will see 14,548 by year’s end. That’s why all week he’s breaking down each component of the index to show the nonbelievers from where the next 1,000 points is coming.

Yesterday, Cramer covered Alcoa through Boeing, so the next six start with Caterpillar . The biggest mistake analysts make with this stock is to think it’s levered to housing, he says. CAT’s a machinery stock, and machinery is the pharma of the ‘80s and ‘90s, says Cramer, and the tech of the late ‘90s. The business for this company is coming more from infrastructure developments in the Middle East than Lennar and Toll Brothers. CAT has 12% growth and only gets a 13 multiple, which Cramer says is just plain nuts. He expects the numbers to go higher – and so will the stock: $90 by year’s end.

Citigroup’s potential for upside is pretty easy to understand, Cramer says. Dump CEO Chuck Prince and the stock should reach the $60 mark. If the company is broken up, it could go to $65. It’s time for the board to wake up, he says.

Coke was reborn through the efforts of Neville Isdell. The CEO boosted growth from the low single digits to the mid single digits through product diversification and international sales. Cramer thinks the stock goes to $60 in the next six months.

Dupont’s a problem, though. It’s a hard stock to value because it’s not just a chemical company, it’s a seed biotech business with a chemical bent. Dupont’s multiple is either high or has peaked relative to competitors like Monsanto and PPG Industries, so the stock should stall at about $55, Cramer says. It will be a lag on the Dow’s march to 14,548.

But Exxon Mobile looks like a must own to Cramer. Even though it’s overvalued and it should have peaked, the stock is too much like the Intel and Microsoft of the ‘90s – you almost have no choice but to own it.

Normally, GE would be next in alphabetical order, but since that’s the parent company of CNBC, he’s taking a pass on it.

Bottom Line: The Dow Jones Industrial Average has close to 1,000 points to go before it reaches Cramer’s year-end target. CAT, Citigroup, Coke, Exxon Mobile should get it there, but Dupont’s more like dead weight.

Jim's charitable trust owns Caterpillar and Citigroup.

Questions? Comments? madmoney@cnbc.com