24/7 Wall St.

Now that 2015 has come to an end, 24/7 Wall St. wants to see what the strategists and analysts on Wall Street are expecting for the stock market in 2016. It turns out the endless bull market was interrupted in 2015 as the Dow Jones Industrial Average closed out the year at 17,425.03 for a drop of 2.2% for the year.

That decline may not be enough reason to call a bear market ahead, but investors know that this comes after six straight years of gains. That -2.2% change in the Dow does not account for individual stock dividends, but General Electric Co. (NYSE: GE) was the best conglomerate stock in the Dow in 2015.

GE closed out 2015 at $31.15, for a gain of 27.5%, if you include its dividend adjustments in the total return. For the year ahead, the consensus analyst price target on GE from Thomson Reuters is $31.77. If the analysts are correct, the expected total return for GE would be only about 4.9% if you include its dividend yield of 2.95%. Oddly enough, GE did not make it into the 2016 Dogs of the Dow.

One thing that may matter now is that 2016 has gotten off to a very bumpy start. General Electric’s shares were trading at $30.35 on the third day of trading for this year.

What the bulls have going for themselves is that GE has completed the Synchrony Financial (NYSE: SYF) transaction. GE also continues to sell off financial assets so that it will be evaluated by investors and analysts as an industrial conglomerate rather than as half industrial and half bank.

One big issue is that GE is buying back a massive amount of stock in the year ahead. The proceeds come from the financial asset sales. Ultimately, GE could shrink its float of shares by well over 10%. It could reach a 20% share count shrinkage, if the most aggressive views are achieved.

24/7 Wall St.
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