Rob Black's Financial Stocks Report

Prudential (PRU) reiterated its overweight rating on General Electric (GE), citing the belief that the diversified industrial giant's growth and profitability of its sales in developing markets appear poised to improve steadily indefinitely. Prudential has confidence grows that earnings will improve at its NBC unit in the fourth quarter, concerns over divestitures should dissipate, and a possible 10% "divestiture discount" could be removed from GE's share price. The firm has a $39 price target on the stock.

Merrill Lynch (MER) cut management investment company Allied Capital (ALD) to neutral citing valuation. The broker told clients that the shares are trading modestly above its price target and that it is somehow less confident that they will witness further capital appreciation in the near term.

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