Nomura Maintains a “Buy” on General Electric; Sees 14% Upside (GE)

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Multinational conglomerate General Electric Company ( GE ) on Monday saw its "Buy" rating reiterated by analysts at Nomura Securities.

The firm also backed its $22 price target on GE, suggesting a 14% upside to the stock's Friday closing price of $19.36.

A Nomura analyst commented, "GE beat our 1Q12 estimate by a penny, driven by a lower tax rate at GE Capital. Industrial organic growth was strong +11%, with organic orders +14%. Real Estate earnings turned positive, which is good, but also helped bring GE Capital earnings to 50% of total in the quarter, higher than we would like. Margins on the Industrial side declined 50bp y/y and missed our estimate, although management reiterated its expectation for 50bp Industrial margin growth for the year. New order pricing was up 50bp and Energy orders pricing turned positive, +0.2%, with Thermal equipment -1.1%, showing bottoming there. Our $22 price target represents approximately 12.5x our 2013 EPS estimate of $1.75."

General Electric shares fell 36 cents, or -1.8%, amid a wide market pullback in morning trading Monday.

The Bottom Line
We have been recommending shares of General Electric ( GE ) since Dec.9, 2011, when the stock was trading at $16.80. The company has a 3.51% dividend yield, based on Friday's closing stock price of $19.36.

General Electric Company ( GE ) is a "Recommended" dividend stock, holding a Dividend.com DARS™ Rating of 3.5 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

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