General Electric (NYSE: GE) closed at $20.35 Tuesday. GE November option implied volatility of 52 is above its 26-week average of 32 according to Track Data, suggesting larger price movement.

Siemens (NYSE: SI) closed at $63.97 Tuesday. SI November option implied volatility of 86 is above its 26-week average of 37 according to Track Data, suggesting larger price movement.

Philips Electronics (NYSE: PHG) closed at $18.71 Tuesday. PHG November option implied volatility of 68 is above its 26-week average of 43.

United Technologies (NYSE: UTX) closed at $50.95 Tuesday. UTX November option implied volatility of 53 is above its 26-week average of 33.

Hitachi Ltd (NYSE: HIT) closed at $51.63 Tuesday. HIT November option implied volatility of 71 is above its 26-week average of 36 according to Track Data.

Honeywell (NYSE: HON) closed at $28.85 Tuesday. HON November option implied volatility of 66 is above its 26-week average of 37.

Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com

Analyst upgrades:

• Jefferies upgraded shares of Air Products & Chemicals, Inc. (NYSE: APD) to Buy from Hold and raised its target to $79 from $63 on valuation as they believe the stock is oversold at current levels and that the company is well positioned to outperform in a slowing demand environment.
  
• Goldman upgraded the U.S. Insurance Brokers sector to Attractive from Cautious and upgraded AON Corporation (NYSE: AOC) and Marsh & McLennan Companies, Inc. (NYSE: MMC) to Buy from Neutral.
  
• Covanta Holding Corporation (NYSE: CVA) was upgraded to Outperform from Perform at Oppenheimer. The firm recommends buying shares because they believe that its business model is defensive and its long-term contracts provide stability.
• First Solar, Inc. (NASDAQ: FSLR) was raised to Market Perform from Underperform at Friedman Billings.
  
• Baird upgraded IMS Health, Inc. (NYSE: RX) to Outperform from Neutral.
  
• The Progressive Corporation (NYSE: PGR) was lifted to Neutral from Sell at UBS.

Analyst downgrades:

General Electric Company's (NYSE: GE) Healthcare segment is worth between $24.1 billion and $59.1 billion, according to my calculations.

GE Healthcare, which constituted 10.1%, 10.2% and 10.0% of GE's consolidated revenues in 2006, 2005 and 2004, respectively, manufactures, sells and services medical equipment including equipment for magnetic resonance (MR), computed tomography (CT), positron emission tomography (PET) imaging, x-ray, patient monitoring, diagnostic cardiology, nuclear imaging, ultrasound, bone densitometry, anesthesiology and oxygen therapy, neonatal and critical care, and therapy.

I think GE Healthcare is a mixed bag for GE. Its technology is excellent and it has good relationships with those in the health care community. However, its revenues shrank because of regulatory problems -- the federal government cut reimbursements to nonhospital imaging centers, which bought less equipment from GE. I am wondering whether such regulatory challenges will impede GE Healthcare's growth in the future -- or whether new products can help revive the growth.

Assuming that GE Healthcare generates net income of $2.2 billion in 2007, here are the range of valuations based on the Price/Earnings ratios of the following peer companies:

• Siemens AG (NYSE: SI) P/E: 27.4. $59.1 billion
• Koninklijke Philips Electronics (NYSE: PHG) P/E: 11.1. $24.1 billion

This is a very wide range of valuations and I am not particularly comfortable with this result so if you have any suggestions, please comment.

Conclusion: Does GE trade at a conglomerate discount?

Peter Cohan is president of Peter S. Cohan & Associates, a management consulting and venture capital firm. He also teaches management at Babson College and edits The Cohan Letter. He owns General Electric shares and has no financial interest in the other securities mentioned in this post.

On tonight's MAD MONEY on CNBC, Jim Cramer continued his stock pick series for "Investing in Europe" with Germany's Siemens AG (NYSE:SI/ADR). He likes the conglomerate that participates in 9 sectors and considers it Europe's version of General Electric (NYSE:GE). The breadth of its businesses also lets it win projects that other companies cannot handle.

Here is the problem with this call: Siemens is a great company but its valuations look higher than most of the other large conglomerates. Its market cap is $131 billion on a currency adjusted basis. Part of its100% rise in ADR's is because of the weak dollar, but even in Euros this stock is up more than 60% over the last year. Keep in mind that these are all ADR's, and even active ADR's tend to trade fewer shares in the US than their US-based competitors.

Philips Electronics (NYSE:PHG) was his top EU pick on Monday, and that is another conglomerate.

His pick from Tuesday was Switzerland's ABB Ltd. (NYSE:ABB), a key infrastructure play.

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.

General Electric Company (NYSE:GE) has been in the news worldwide this past week. The company has had its PG9171E gas-fired generator banned by the Chinese government until design modifications are made that reduce the likelihood the generator could explode, causing large-scale industrial accidents. GE currently has 24 of these large generators in China. GE insists that the PG9171E gas turbines are safe, even when coupled with a GE 9A5 generator, which itself has been redesigned. GE Aviation, in conjunction with Rolls Royce, recently won a $340 million contract to develop a Joint Strike Fighter engine for use by US armed forces, as well as UK military branches.

Also in military news, the Department of Defense awarded a contract worth $44 million to GE Medical Systems to maintain GE's imaging equipment units. Dutch company Philips Electronics and Geman engineering firm Siemens will participate in the contract. GE has recently entered negotiations to buy a significant stake in Romanian state owned electrical equipment maker Electroputere Craiova. The company is currently a money loser, but GE has plans to expand into the developing economies of eastern Europe.