CS First Boston Downgrades GE to 'Neutral'
Credit Suisse First Boston downgraded General Electric (GE ) to neutral from outperform.
On Thursday the company reaffirmed third-quarter 2002 earnings per share guidance, and revealed some shortfalls. Analyst Michael Regan says he had thought the company would outperform his index of companies because it would be seen as a defensive safe haven during a period when concerns about the economy's health are rising. Instead, the third-quarter earnings per share guidance fell short as an anticipated rebound in short-cycle businessses faded during the quarter and GE Capital showed weakness.
Regan says the company projected $0.41 third-quarter earnings per share on a reported basis; but operating earnings per share looks to be $0.38, vs. his $0.41 estimate. As a result, he cut his $1.66 2002 estimate to $1.62, and cut the $1.78 2003 estimate to $1.72. He set a $29 target, with shares trading at 17 times the 2003 $1.72 estimate.