GE's financial services businesses provided 32.3% of consolidated revenue to the parent company in 2009, so the stakes are high. Equity holders clearly feel "finreg" will have a negative effect on GE. The stock has lost 22% of its value over the last three months, more than double the 9% that the Dow has dropped over the same stretch. Investors are increasingly worried about how GE Capital will respond to the stricter rules that are expected to be adopted.
Argus analyst John Staszak acknowledged the fears behind the stock's selloff in a recent research note, but also displayed some skepticism about how well founded they are.
"Regulatory concerns, though perhaps overblown, are likely to weigh on the shares in the near future," Staszak wrote.
Credit Suisse analyst Julian Mitchell falls into the camp that the reform bill will not hurt GE in any way. He believes current analyst expectations for the GE Capital business are too low, and goes further, suggesting that: "
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV