The giant caterpillar of the Dow Jones breaks out; Tesla Stock, Chipotle Boast Rising Earnings Estimates

You’re here (TSLA), as well as breakout Dow Jones stock caterpillar (CAT,)

Wednesday’s stocks to buy and watch come from the “Rising Profit Estimates” screen, which finds issues attracting higher price targets and analyst upgrades. In addition to stock Tesla, the latest screen also highlighted Chipotle Mexican Grill (CMG) and Caterpillar, a member of the Dow Jones.

Tesla Stock

Tesla stock continues to trade around 30% above a buy point of 207.79 in a double bottom after a June 1 breakout. Shares rose 1.5% midday Wednesday, still on pace to end the week with modest losses.

The Giant EV is an IBD Leaderboard stock.

On April 19, Tesla reported a sharp decline in first-quarter earnings, while revenue lacked views. The global electric vehicle giant’s profit margins have also fallen below 20% as the company executes an aggressive price-cutting strategy.

But in early July, the electric vehicle leader announced record global deliveries as price cuts and rebates propelled demand well above Wall Street forecasts. Tesla deliveries were 466,140 in the second quarter, topping the first quarter record of 422,875 and the fourth quarter record of 405,278. That easily topped second-quarter estimates of about 445,000, according to FactSet.

For 2023, Tesla’s profits are expected to fall 17% before climbing 44% in 2024.

Amid strong fundamentals and strong price gains since early January, Tesla stock boasts a near-perfect IBD Composite Rating of 98 out of 99, according to IBD Stock Checkup.

Dow Jones Giant in buy range

Caterpillar, machinery giant Dow Jones, exceeds the buy point of 250.89 in a cup with handle, according to IBD MarketSmith’s chart analysis. The 5% buy zone rises to 263.43. Shares edged 0.1% midday Wednesday, on pace to add to Tuesday’s breakout gains.

CAT stock started 2023 on a tear as investors followed the money – more than $1 trillion in federal spending on mining, manufacturing and infrastructure thanks to three major signed legislative packages by President Biden. And that may not include another trillion dollars of private investment encouraged by federal support.

Caterpillar is an IBD SwingTrader stock and was Tuesday’s IBD stock of the day.

Chipotle tests key level

On June 30, Chipotle stock broke above the buy point of 2,139.88 on a flat basis. But stocks quickly reversed course and are about 4% below their buy point in the current stock market.

This week, the stock is testing its main 50-day moving average. Further weakness would send CMG stock deeper below its 50-day line and likely trigger the 7% sell rule from the last buy point.

Last quarter, Chipotle’s earnings soared 84% to $10.50 per share on a 17% jump in revenue to $2.36 billion. Wall Street expected Chipotle to earn $8.95 a share on revenue growth of 16% to $2.34 billion.

This year, Chipotle’s revenue is expected to jump 35%, with a 21% increase in 2024.

Be sure to follow Scott Lehtonen on Twitter at @IBD_SLehtonen to learn more about growth stocks and the Dow Jones Industrial Average.


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