GO
Loading...

Enter multiple symbols separated by commas

GE Upgraded By Goldman Sachs

A Goldman Sachs analyst lifted his opinion on diversified conglomerate General Electric , saying the maker of light bulbs and power generators is seen by many investors as a safe bet in an uncertain industrial environment.

Deane M. Dray in a client note amended his rating on General Electric to "Conviction Buy" from "Buy" ahead of a Dec. 12 outlook meeting with Chief Executive Jeff Immelt. (GE is the parent company of CNBC.)

Anticipated upbeat comments at the meeting could drive shares upward, he wrote. Analysts will be looking for comments on the company's plan to turnaround NBC Universal, which has been plagued by low Nielsen television ratings in the past, as well as information on a recovery in GE's power systems segment and emerging market opportunities, he said.

In addition, the fourth quarter is typically seasonally strong for General Electric, wrote Dray, who has a $42 target price on shares. That is partially due to overall market strength, coupled with some funds' use of GE and similar stocks to lock in annual gains at year-ends.

Dray expects the company's earnings to grow between 10% to 12% in 2007.

"At this point in the cycle, in a moderating growth operating environment and greater uncertainty in the industrial sector, we believe investors will gravitate to GE's late-cycle exposure, high-margin services mix, emerging markets strength, and attractive earnings visibility/consistency," wrote Dray.

Dray also estimates the conglomerate will spend between $6 billion to $10 billion in industrial acquisitions over 2005 to 2007, and expects some restructuring of its industrial portfolio ahead.

Contact U.S. News

  • CNBC NEWSLETTERS

    Get the best of CNBC in your inbox

    Please choose a subscription

    Please enter a valid email address
    To learn more about how we use your information,
    please read our Privacy Policy.

Don't Miss

U.S. Video

  • CEO discuss the 'Buffett factor'

    John Stumpf, Wells Fargo chairman & CEO; Kenneth Chenault; American Express chairman & CEO; Ginny Rometty, IBM chairman & CEO; and Muhtar Kent, Coca-Cola chairman & CEO, discuss their relationships with Warren Buffett and marvel at just how easy it's been to communicate with him.

  • Rometty on Watson: He never stops learning

    IBM CEO Ginny Rometty talks Watson, and how it's going to help people make decisions. It never stops learning, she says. Rometty also discusses the company's dividend.

  • Why Buffett bought more IBM

    Berkshire CEO Warren Buffett addresses his purchase of more IBM shares and allegations of predatory lending at Clayton Homes.