Deutsche Bank Believes GE Capital (GE) Losses Can Be Funded Internally
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Deutsche Bank provided some updated thoughts on General Electric (NYSE: GE) following last week's GE Capital investor day. The firm said their central assumption is that GE Capital losses can be funded internally.
The firm said, "Our major takeaway was the high sensitivity of losses to macro inputs. As such, while a GECC pre-tax loss of ~$4bn seems appropriate given our current outlook, this could meaningfully accelerate if the global economy steps down again. Therefore, further equity injections into GECC are realistic outcomes, but our analysis suggests that GE has the internal capacity to provide up to $15-20bn of support through the end of 2010, which should be sufficient."
The firm is reiterating their Hold rating and $11 price target. The firm continues to value GE Capital at zero until visibility improves.
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