(MONEY Magazine) – In 1985, when the dollar began its downhill schuss against foreign currencies, falling nearly 50%, stocks in leading export companies moved sharply upward (see the chart below). Reason: as goods priced in dollars became cheaper for customers abroad, sales increased. The October 1987 crash broke the stocks' price rise, however, and the greenback's post-election wobbles provided no lift. But if the dollar erosion continues, exporters' overseas earnings should rise. Despite the renewed strength that the currency displayed in early December, it remains under downward pressure from the trade and budget deficits. Thus many forecasters predict a further decline of 5% to 20% over the next 18 months. One stock that stands to benefit, according to Michael J. Howe, research director at the Philadelphia brokerage Butcher & Singer, is AMP Inc. (recently traded on the New York Stock Exchange at $44), the world's leading maker of electronic connection devices, which derives half of its $2.7 billion revenues abroad. Even without a fall in the dollar, demand for its products is bound to rise, Howe maintains, because goods ranging from appliances to airliners rely increasingly on electronic gear. ''AMP serves such a range of industries in so many countries that several markets would have to sour for it to have a bad year,'' he says. Earnings, which hit $1.52 a share in 1986, are booming -- he estimates them at $2.95 for 1988 and $3.40 in 1989 -- and he expects the stock to leap well above $50 within 18 months. A huge backlog of commercial aircraft orders from customers in many parts of the globe has analysts predicting dramatic earnings increases for Boeing (NYSE, $63.75). Thomas O. Lloyd-Butler of Montgomery Securities in San Francisco suggests buying on weakness; he thinks the shares are attractive at $60. At $80, he would consider selling. Craig Hart, an analyst at Seattle's Ragen MacKenzie, likes Weyerhaeuser (NYSE, $24.75), both for its 4.9% dividend and its undervalued assets. The forest-products exporter is the nation's largest private holder of timberland, which it carries on its books at far less than the current market value. Hart says $35 is his target price. Dennis Jarrett, Kidder Peabody's market strategist, likes the drug company Schering-Plough (NYSE, $58.75). Says he: ''Despite strong new product flow and improved earnings, the stock has remained beaten down.'' Eugene Melnitchenko, research director at the Dallas brokerage Eppler Guerin & Turner, is betting on Merck (NYSE, $58): ''Pharmaceuticals will do better than the overall market next year. And Merck is the benchmark for the industry.''

CHART: NOT AVAILABLE CREDIT: Sources: Morgan Guaranty Trust, Standard & Poor's CAPTION: Stocks with the biggest bang from the buck The stock index charted here against a dollar index is made up of six industry groups that are highly sensitive to fluctuations in the greenback -- aerospace, chemicals, drugs, machinery, paper and steel. When the dollar rose in 1983 and 1984, these stocks languished. As the dollar started to fall, however, they took off, only to plunge in the crash (along with everything else). Now many analysts believe they will rise again if the dollar continues to sink.