Deutsche Bank Slashes Price Target On General Electric (GE); Valuing GE Capital at Zero, Sees Further Equity Injections

Deutsche Bank cut its price target on General Electric (NYSE: GE) from $17 to $12, saying it is prudent to value GE Capital at zero.  The firm sees a modest breach of GE Capital fixed charge covenant, which could require further equity injections.

Commenting on the lowered outlook for GE Capital, the bank said, “Following a review of the 10K filing we have become much more concerned that the $20+bn of unrealized losses at year-end could both accelerate through 2009 and be recognized. As such, we have further lowered our Capital Finance target to below $3bn vs. current $5bn guidance and this was the primary driver of our new 2009E of $1.20.

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