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Industrial conglomerate General Electric's (GE) - Get Free Reportmixed fourth-quarter results has many investors concerned about the company's future, sending this otherwise solid stock down by more than 5% in the past six days.

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But does this give investors a great opportunity to grab this stock at a discount?

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Although GE reported growth in its order backlog of $321 billion and returned more than $30 billion to shareholders via buybacks and dividends, fourth-quarter revenue was a major disappointment.

The company recorded a year-over-year revenue decline of 2.4% to $33.09 billion, missing analyst forecasts by as much as $540 million.

There are two reasons why this is particularly troubling.

First, GE's organic revenue in its industrial businesses slid 1% and came in below the company's growth forecast of as much as 2%.

Second, the poor revenue missed GE's own reduced forecasts for the year.

Analysts are questioning whether slow fourth-quarter organic revenue growth implies that the company will miss its 2017 target of 3% to 5% growth. These concerns are particularly valid, given the fact that the fourth quarter marks the second consecutive quarter of weak revenue for GE.

However, GE Chief Executive Jeffrey Immelt sought to reassure investors on this point during his earnings conference call by reaffirming the company's 2017 target. And analysts have pointed out that GE's purchase last year of French transportation company Alstom could help the company boost its revenue this year.

Still, there are other concerns about GE's future. Although the company expects to gain from a cut to corporate tax rates by the Trump administration, a delay on the part of Congress in changing healthcare legislation could cause medical equipment sales to drop.

Amid a downturn in commodity prices and an industrial slowdown, investors expect companies such as GE, which derives a significant portion of its revenue from its industrial businesses, to cut costs and improve profitability. With a 7% profit margin, GE is miles ahead of rivals Caterpillar (CAT) - Get Free Report and Deere (DE) - Get Free Report but lags behind Illinois Tool Works (ITW) - Get Free Report ,which has a profit margin above 14%.

Given the headwinds that GE faces, is it still a reliable investment?

For new investors, GE makes for an attractive opportunity.

The 16 analysts offering 12-month price forecasts for GE have a median price target of $35 a share, which would represent an increase of about 17% to 18%. GE also offers a 3.2% dividend yield.

Once its stock corrects after the earnings report backlash, taking its dividend into account, investors could gain more than 20% in terms of total returns.

Although it is impossible to predict how this year will work out for GE, for those who recognize this tried-and-true company's ability to carve out success, the stock is a great value pick.


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The author is an independent contributor who at the time of publication owned none of the stocks mentioned.