Fairfield-based General Electric Co. shares reversed an early drop in volatile trading early today as analysts expressed mixed views regarding the company’s prospects after the conglomerate’s stock hit 18-year lows yesterday.
Worries about just how much exposure its financing arm GE Capital has to bad debt and whether it will need to find outside capital to buttress the unit have mounted and sent the shares on a four-day slide. The shares are down about 60 percent so far this year.
Investors allowed fears about GE Capital to overshadow the contribution the company’s other businesses make to GE’s sales, according to Deutsche Bank-North America analyst Nigel Coe.
GE makes a range of products like jet engines, electrical transformers, nuclear reactors and toasters, as also operates the NBC television network. He values the company’s industrial segment at $12 per share.
At 11 a.m., GE traded at $6.99, up 30 cents, or 4.5 percent, following a volatile premarket session. On Wednesday the stock fell as low as $5.73 – a level not reached since 1991.
“We have to admit we’re inclined to be much more positive since GE’s industrial businesses are clearly worth more than the current share price,” Coe wrote in a note to clients. The analyst said the stock’s recent sell-off “seems very bearish, but the equity market has become convinced that GE Capital is under-capitalized.”
