Calls of Note Part 5

- UBS notes that on September 14, they downgraded their rating on GE (NYSE:GE) to Neutral, from Buy, to reflect belief that earnings growth may be challenged by the shape of the yield curve, a bottoming out of reserves at GE Capital, higher tax rates, continued earnings softness at NBC and the eventual deceleration of aerospace aftermarket activity. They now believe developments over the last few months continue to suggest risks to GE's earnings growth rate in 2007, including a somewhat disappointing showing for NBCU's new primetime lineup, industrial companies' guidance of higher tax rates in 2007, the continued lag in GECC loss provisions behind receivables write-offs (through Q3) and increased evidence of aerospace aftermarket activity deceleration.

On December 12th, at its scheduled investor meeting in NYC, they expect GE to provide its formal earnings guidance for 2007. Given potential headwinds, the firm expects GE to guide to earnings growth in the 10%-12% range, somewhat below the roughly 13% currently built into the consensus earnings forecasts.

They maintain their 2006 EPS estimate of $1.97 and 2007 EPS estimate of $2.20. The below consensus estimate for 2007 assumes roughly 12% earnings growth, driven by earnings growth of roughly 7% in GE's finance businesses, 15% at Healthcare, 10% in Industrial, 12% in Infrastructure and 7% at NBCU.

Maintains Neutral and $38 tgt.

Notablecalls: I have no feel for GE here but I thought to highlight the call just in case.