bullwinkle

Eaton: Unappreciated New-Age Stock - Barron's

The main problem I see with GE is that it still has a fairly high P/E considering that it is about 50% financial. A typical industrial stock trades around 13x and a typical financial these days trades around 9x, which suggests that a fair multiple for GE should be around 11x rather its current estimate of about 13-14x. This is a very hazy valuation methodology, but it suggests that the stock could drop another 15-20%, to around 25. The dividend yield is very appealing, however, and the stock seems to be forming a base around the 30 level, so if financials start picking up this stock should do better. However, if financials stay under pressure I think GE could go lower.