General Electric Co. (NYSE: GE) is set to report earnings on Friday morning of $0.38 EPS on revenues of almost $40.2 billion. If the stock’s performance is any barometer, let’s just say that expectations are high and GE probably cannot dribble out a so-so quarter to keep the investors happy. GE has been the best performing conglomerate of late, but in our year outlook analysis it was United Technologies Corporation (NYSE: UTX) which may offer the most upside of all conglomerates this year. We would be looking for close response in shares of 3M Co. (NYSE: MMM) based upon Friday morning’s earnings.
GE continues to improve its internal workings and continues to improve its customer credit metrics in the GE Capital operations faster than most expected. The company’s dividend hike came sooner than expected and this conglomerate is returning to normal sooner than expected even if the total portfolio changes is going to look like a decline in revenues on the surface. While United Tech might have been the cheapest conglomerate, it was still General Electric which we included in the 24/7 Wall St. 2012 Model Dividend Portfolio.
GE was also listed as one of Jim Cramer’s 4 Favorite DJIA Stocks For 2012.
After a 0.7% rise on Thursday to $19.15, GE shares are up 6.9% year to date. What is more impressive is that after you adjust for the dividend payment the stock of the conglomerate is up a massive 21.5% from the end of November and shares are up a massive 31.5% if you were lucky enough to buy shares on the day after Thanksgiving and hold them.
The manner in which GE is acting is that it wants to go well back over $20.00. That is what its chart action is indicating at any rate. At some point, it will take more continued good news of some sort from the company to make that sustainable.
In case GE manages to disappoint the street, the 50-day moving average is $16.89 and the 200-day moving average is $17.32. The first support level would come in around $18.00 if any serious disappointment comes up and then down in the $17.60 area if the news is somehow much worse than investors are expecting. Shares are now back up at levels not seen since last July and the historic 1-year chart shows that all sorts of resistance will come back into play in the $20.10 to $20.30 areas.
Thomson Reuters has a consensus (mean) price target objective of $21.21.
JON C. OGG