Just as GE's finance units are unlikely to record massive writedowns the way other banks do these days due to their subprime exposure, so are its other units less exposed to the slowing U.S. economy. With an above-average dividend yield of 3.5%, and divisions like health care equipment and electricity generation that will not be hurt by a weakening economy, the stock is positioned as strong defensive play. Not only that, but Inch expects GE to be more profitable this year than the rest of the S&P 500, which is inline with GE's own forecast of 10% profit growth for 2008.
By the way, Jim Cramer today also mentioned GE as a stock with a high dividend yield, backed by a company with a good business, and which is likely a bargain now.
Back to Inch, he also mentioned that with GE's AAA credit rating, it could buy financial assets from rivals at discount prices (well, doesn't that sound familiar these days?).
He put a target price on GE stock of $43, based on $2.75 earnings per share in 2009 and a P/E multiple of 15.5. Unless we're headed to a significant global slowdown, this doesn't seem outrageously priced. Not in the least.
While conglomerates seem to be quite unpopular these days on Wall Street, GE has proved itself to be a well managed one. With its different business segments, specifically turbines, medical equipment, and the increasingly much-needed water treatment and solar energy, I tend to agree with Inch's overall outlook.
GE's recent webcast perhaps started the move upward, but this analyst note -- and he's not the only one -- definitely helped boost the stock further.
Were News Corp.'s 'Ice Age' sequel and GE's 'Public Enemies' disappointments? 
Before the bell: Futures decline as oil falls sharply; GM's bankruptcy plan approved
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