Tuesday, July 01, 2008

General Electric (NYSE:GE): Possible 2Q08 earnings upside trade - Merrill Lynch

Merrill Lynch reiterates their Buy rating on GE with PO $37.50.

Firm thinks GE will likely deliver 2Q08 EPS results in-line with the previous guidance of 53-55 cents – this event could present a positive upside trading catalyst for GE’s shares. They believe GE would have pre-announced an earnings shortfall rather than risk even greater investor backlash from reporting a miss the day of the earnings release. After 2Q08, earnings comparisons start to ease. GE has already materially lowered guidance for the full year and consensus expectations have declined substantially since mid-April. Firm believes the impact of higher loss provisions, lower securitization gains, and slower Real Estate markets are part of the company’s previous guidance.

Notablecalls: Ah, lovely. Just what we need this morning. GE's a buy here for sure. The co already lowered the bar and has traded down significantly from here. I'm betting the stock will surpass the $27 level in the s-t.

Calling it Actionable Trading Call


fun said...

Tough call. There will be a bounce sooner or later when a blue chip like GE is down 25%. This sell-off definitely looks appealing, but the note from MLCO might not be good enough in this sloppy market.

fun said...

A nice bounce, well done! I was too overcautious.

andres said...

I don't know about this one. I know that the industrial(C&I sales down 56% compared to last year for 2Q) and consumer finance will be below expectations. However, GE is so big that maybe infrastructure and NBC report above expectation and even things up. I only know that if Immelt underperforms he is out.