Dow Jones Giant Is Actionable After 17% Run But Flat Q2 Earnings Expected

Dow Jones industrials component Caterpillar (CAT) and fellow heavy machinery play United Rentals (URI) both jumped into early buy zones on Monday, breaking downward sloping trendlines. CAT and URI stock gained ground early Tuesday.

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Caterpillar stock gained 4.3% to 360.57 during market action on Tuesday, after jumping 3% to 345.77 on Monday. The move broke a downward trendline, signaling an early entry opportunity, as the Dow Jones stock overtook its 50-day moving average.

Caterpillar stock is officially in a double-bottom base with a buy point of 364.43, according to MarketSurge analysis. Ahead of Tuesday trade, the Dow Jones stock gained 17% on the year with the IBD-tracked Machinery-Construction/Mining industry group advancing more than 9% in 2024.

United Rentals advanced more than 5% to 743.24 Tuesday, adding to a 4% gain to 707.41 on Monday. URI stock is up 15% in July after booking increases in five consecutive trading sessions.

Like Caterpillar, United Rentals has now broken a downward trendline and is back above its 50-day moving average. The stock is also currently basing with an official buy point of 732.37, according to MarketSurge.

Dow Jones: Caterpillar, United Rentals Earnings Upcoming

United Rentals reports second-quarter earnings and revenue on July 24. Caterpillar is expected to announce Q2 earnings in late July.

Analysts project flat Q2 earnings for Caterpillar with revenue declining around 3%, according to FactSet. Back in April, Caterpillar said full-year revenue should be “broadly similar” to record 2023 results.

United Rentals is projected to see both Q2 EPS and sales grow more than 6%. At the end of June, Citi initiated coverage of both Caterpillar stock and United Rentals stock with buy ratings and price targets of 380 and 745, respectively.

Citi’s outlook for machinery “leans neutral-to-positive” with the most upside for construction-specific plays, driven by its “better-than-feared” outlook for North American nonresidential construction.

Meanwhile, Truist on July 2 lowered its URI price target to 785 from 796. The firm believes the recovery in industrials has been pushed out by six months, setting the machinery group up well for 2025.

Please follow Kit Norton on X @KitNorton for more coverage.

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