Tuesday, May 11, 2010

"Credit Suisse Starts GE at Outperform: ‘Different This Time’"

For some reason I thought of this post from last month:
"Analyst Reaction: "GE Earnings: ‘Momentum Play for First Time in a Decade’".
The stock is trading down 12 cents at $17.92.
From MarketBeat:

Let’s just say it. GE’s been a dog for about a decade. (Since the end of 2000, it’s down almost 63% versus the S&P’s -13%.)

Still, over the last couple months there’s been plenty of optimism on shares of GE from sell-side analysts. The result from the shares? Little. In fact, since delivering a nice bottom-line beat in its last earnings report, GE shares are still down around 7.7%. Worse than the Dow’s 3.9% or the S&P’s 5% over the same period.

That doesn’t stop analysts from growing keener on the shares. According to Thomson Reuters, of the analysts covering GE, seven have “buy” calls, six have “holds” and there aren’t any “sells.” Credit Suisse joined the party Tuesday, when the firm started GE at “Outperform” and slapped a $23 price target on the shares, which opened Tuesday below $18. Credit Suisse’s investment case for GE is based on a few legs, here are some:

  • Reinvigorated earnings. Easier said than done, yes. But Credit Suisse analysts say as GE makes moves towards becoming a more focused industrial company, it will be better suited toward taking advantage of the cyclical economic recovery. “Although GE’s business mix is fairly similar today to 2003-2004, we think that its cycles for the next 1-2 years will be moving concurrently on an upwards trend, and this is something that was not true last time,” CS analysts write....MORE