General Electric (GE) Higher After Goldman One-Ups JP Morgan

One day after making a strong move higher after a JP Morgan upgrade, shares of General Electric (NYSE: GE) are up another 2% today after another firm got more bullish on the stock. Not to be outdone, today Goldman Sachs lifted its price target on GE from $15 to $18 while maintaining a Buy rating. Goldman's new price target is the 2nd highest on 'the street' and represents 24% upside to yesterday's closing price. Goldman's calls was part of a broader upgrade of Multi-Industry stocks.

In its report on GE today, Goldman said the risk on GE Capital appears manageable while the Industrial unit continues to modestly outperform.

On GE Capital, Goldman notes that there doesn't appear to be legislative support for regulatory reform that would require a dilutive separation of GE Industrial and GE Capital. They also note GECS funding is complete for 2009 and nearly so for 2010. Furthermore, moderating US consumer credit losses are also positive. Goldman said while uncertainties about reserve adequacy, commercial real estate losses, and longer-term capital requirements, remain they believe sentiment is overly negative and expect investor focus to shift to the upside potential in a normalized environment as the economy and credit markets continue to recover.

On the Industrial side, Goldman notes performance has been solid and said 2009 cost cutting could drive upside in 2010. Goldman raised their 2010/2011 GE Industrial EPS estimates to $0.77/$0.90 from $0.70/$0.80 on better margin performance across the portfolio and a shallower trough in Aviation and Wind equipment markets.

Giving a hint of future price target hikes on GE, Goldman said there could still be 30% upside to their new $18 price target if they switch their valuation methodology.

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