General Electric shares have risen more than 85 percent since hitting their March bottom, and Steven Winoker of Sanford C. Bernstein & Co. said he thinks the stock's upward trend will continue.
"The upside and the momentum behind that upside is really driven by reduced uncertainty in the capital business, and strength in the services part of the industrial business into next year," said Winoker, who assigned the stock a $16 price target.
This strength will offset a steep decline in equipment orders, which fell more than 40 percent in the second quarter, Winoker said. Still, most of the conglomerate's risk lies in GE Capital, and Winoker doesn't see the stock rising much more than 15 percent.
"The concern going forward on the capital side of the business is that there will be a requirement from the government for increase equity ratios ... and would be required to hold more capital," he said.
"We don't see that there's any real risk of a legislative forced split in the business, and I think that as that uncertainty continues to come down, that that will relieve pressure and people can start thinking about GE once more on the fundamentals and less and less on the liquidity and credit questions."
GE is the parent company of CNBC.
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Disclosures:
General Electric is or during the past 12 months was a client of Sanford C. Bernstein & Co.