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Shares of General Electric Co. gained ground Thursday after bullish UBS analyst Chris Snyder raised his price target by 15%, saying the aviation, power and renewable-energy company is a defensive play in the face of a worrisome economic outlook.
Synder said while the market’s valuation of GE’s
GE,
stock may be “pushing near the upper limit,” his chief concern is geopolitical, not macroeconomic.
“[GE’s] exposure is defensive and well positioned for the macro at hand with each business line seeing low-risk [positive] rate of change, into both 2023 [and] 2024,” Snyder wrote in a note to clients.
He reiterated the buy rating he’s had on GE’s stock for at least three years while lifting his price target to $109 from $95. The stock hasn’t closed at or above $109 since January 2018.
The stock rose 0.2% to close at $94.30, with Snyder’s new price target implying further 15.6% upside. It has slipped 2.7% since closing at a five-year high of $96.92 on April 3.
Synder said his new price target includes a $94-per-share valuation for GE’s aviation business and a $16-per-share valuation for GE Vernova, which includes the company’s power and renewable-energy businesses.
GE Vernova is expected to separate from GE in early 2024, which would leave GE operating as GE Aerospace. GE HealthCare Technologies Inc.
GEHC,
separated from GE in January 2023.
GE is scheduled to report first-quarter results on April 25 before the opening bell. Since the end of January, after the separation of GE HealthCare, the average analyst estimate compiled by FactSet for earnings per share has increased to 14 cents from 13 cents, while the FactSet revenue consensus has slipped to $13.25 billion from $13.35 billion.
Of the 21 analysts surveyed by FactSet who cover GE, 14 are bullish and seven are neutral, and the average stock-price target is $101.17. Snyder’s new price target makes him the fourth most bullish on the stock.
GE shares have run up 17.2% since the end of January, while the S&P 500
SPX,
has advanced 1.7%.
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