Goldman on GE: Now is Prime Buying Opportunity

Given current market fears about sub-prime lenders and general volatility, Goldman Sachs is pointing out the benefits of General Electric Co. (GE).

The firm, which has a “buy” rating and US$42 price target on the stock, which represents upside of more than 20%, notes GE’s limited exposure to sub-prime markets (less than 1% of revenues) and the fact that the stock has historically outperformed during market corrections of more than 5%.

Goldman’s Deane Dray views the 8% year-to-date decline for GE shares as a prime buying opportunity.

“In our view, GE still sits squarely in the sweet spot of the late cycle operating environment and we continue to like GE’s prospects for low-execution risk for 10%-13% earnings growth in 2007,” the analyst said in a note to clients.

“In a moderating industrial growth operating environment, we believe investors will gravitate to GE’s international and late-cycle exposure, and high-margin services mix.”

GE 1-yr chart: