NEW YORK (
may be poised to beat Wall Street expectations when it reports its first-quarter results on Friday, according to a longtime skeptic of the conglomerate who has lately turned more positive.
Nick Heymann, analyst at Sterne Agee, upped his price target to $22 from $21 in a report published Thursday, saying aggressive cost-cutting moves and strong performance in GE's aftermarket businesses should drive the upside surprise. The term "aftermarket" refers to parts that do not come with a product at the time of purchase. Heymann estimates aftermarket sales account for more than 50% of sales in GE's industrial businesses.
Heymann, who has a "neutral" rating on GE's stock, was the last analyst covering the company to remove his "sell "rating, making the
just under a month ago.
Heymann now expects General Electric to earn 21 cents per share in the first quarter, putting him at the top of the range of 11 analysts surveyed by
. GE earned 28 cents in the fourth quarter last year and 26 cents in the first quarter of 2009, much of it driven by tax breaks. Heymann sees "normalized" annual earnings per share of $1.40-1.50 per share for GE starting in 2012. GE earned $1.03 per share in 2009.
Other factors that Heymann will focus on when GE reports its first-quarter numbers include losses from the Winter Olympics coverage by the conglomerate's NBC Universal unit. He expects losses related to the coverage may be "significantly less" than the $250 million he originally expected.
GE shares were up 1.21% to $19.58 in late morning trading Thursday, setting a new 52-week high, something they have done consistently in recent weeks. The shares dipped below $6 on March 4 last year, when the market hit bottom during the crisis. The stock's all-time high above $60 came all the way back in September of 2000, when the company was still run by legendary CEO and Chairman Jack Welch.
Written by Dan Freed in New York