NEW YORK (TheStreet) -- General Electric (GE) saw two more target price hikes from analysts Monday, even as one of those analysts, Steven Winoker of Bernstein Research, expressed his doubts about the wisdom of buying into the stock at current valuations.
Winoker, who maintained his "Market-Rerform" rating on the stock, argued that continued bullishness required an act of "Valu-Magination,"--a pun on the company's "Ecomagination" slogan.
Winoker nonetheless raised his target price to $24 from $22. General Electric shares were up 1.21% to $22.98 shortly after midday on Monday. He notes the shares have outperformed the S&P 500 by 21.83% over the past year, 12.24% year to date, 4.54% since late August and 6.90% during the past month.
Winoker attributes the rally to a recovery and shrinking of GE Capital including the potential sale of the unit's consumer business. GE Capital also has cash available to pay dividends to the parent company. He also points to the sale of GE's remaining 49% of NBC Universal, which GE has the option to force majority owner Comcast (CMCSA)to buy in 2014, as another potential cash generator. The expectation GE will only pursue acquisition targets of less than $3 billion--thus preserving additional cash for increased dividends and buybacks--as well as above average margins are other factors Winoker believes has given a boost to the stock. Still, even allowing for a valuation Winoker argues represents "a healthy premium" to other industrials, he cannot justify taking the target any higher than $24.Credit Suisse analyst Julian Mitchell is more bullish, upping his target price to $25 from $22 and maintaining an "outperform" rating. "We are increasingly confident in medium-term earnings power of $2, implying the share price should hit the mid-$20s in the next 12 months," he writes, adding the GE remains his top pick in its sector. The target price hikes from Credit Suisse and Bernstein follow three others on Friday on the heels of a company presentation Thursday in which management raised revenue targets for the industrial business. -- Written by Dan Freed in New York. Follow @dan_freed
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