General Electric (NYSE:GE) hit a 52-week high this week. This comes after a battery of analysts raised their price targets on the company. Barclays Capital put a $24 price target on the stock, while JPMorgan increased theirs to $22. Citigroup issued a “buy” rating and raised its price target to $25. GE has seen increased earnings per share every quarter for two years, which could be fueling these ratings.
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While Citi and Barclays think there is more value to be gained in GE stock, JPMorgan looks more skeptical. The stock has already risen 22.3 percent this year to date, and outpaced the S&P 500 Index. GE’s price to earnings ratio is 18.1, above the industry average of 17.5. Zacks maintains a “Hold” on the stock.
Confidence that GE will continue to grow could be fueled by the company’s Oil & Gas unit, which recently landed a $1.1 billion contract with Petrobras Brazil (NYSE:PBR) for sub-sea wellhead production. This is the second huge deal the company has landed in the region.
GE might lose out elsewhere, as the panel that oversaw Union Pacific’s (NYSE:UNP) $1.5 billion taxpayer-funded high-speed rail project may change the rail specs. Right now, GE only makes engines that reach 110 mph, which was the initial proposed speed for trains on the line. However, the committee is “unanimous in their belief that 125 mph is important for the future,” according to Deputy U.S. Transportation Secretary John Porcari.
Rob McKeel, GE general manager of global locomotive, responded, “In a time of great fiscal constraints, why should taxpayers pay more money to save a fraction of travel time that can’t even be achieved unless states spend billions of dollars to undo work they already have done?”
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