Analyst Backing General Electric After Annual Outlook (GE)

Stern Agee is remaining very positive on General Electric Co. (NYSE: GE) after the conglomerate’s 2012 outlook was offered up.  Ben Elias, the analyst covering the company, noted that the company’s industrial growth vehicle is “gassed up and ready to go” even though Europe was called as being “under control but likely to cast a shadow into the second half of 2012.”

The note says that GE has cleaned house to get its portfolio ready for growth and the initial 2012 revenue growth outlook should give 5% revenue growth and operating margin growth in the double digits.  The  industrial businesses will now be generating approximately three-quarters of 2012 EPS growth and will once again be the backbone of the company.

As far as what is built in here, a Euro Zone recession for a year is (supposedly) built-in, as is a cash buffer, as is a continued transition to energy.  The firm also expects what Jeff Immelt refers to as “adjacencies” as a strategy to add incremental growth.

Another big help is the dividend growth, from $0.60 to $0.68 on an annualized basis. Technically this is no change from the Buy rating nor from the $22.75 price target objective.  This target remains well above the almost-$21.00 price target objective from Thomson Reuters.

On a separate note, Credit Suisse reiterated its Outperform rating on GE and raised the earnings estimates for its $22.00 price target objective.