General Electric looks overseas for growth
Shares are attractive even amid economic uncertainty.
Wall Street analysts have an average one-year price target of $21.71 on GE, which is about 15% above the current price. The company is trading at a multiple of 15.04, below its five-year high of 16.87, according to Reuters. GE's diverse lineup of products and services and worldwide reach make it an ideal proxy for the global economy. That means as the economy eventually rebounds, GE's shares will look more attractive. Its strength is formidable.
Revenue rose 29% in China in 2011, 36% in Latin America, 14% in Sub-Saharan Africa, and 67% in Australia and New Zealand. The U.S., where revenue grew about 8% in 2011 to $75.1 billion, also did well. Like many large American companies, though, GE sees much better growth prospects overseas.
Vice chairman John Rice said Wednesday that the conglomerate expects "continued double-digit revenue growth in its global growth regions in 2012 and 2013." Latin America, Australia and New Zealand, the Middle East and Africa are expected to grow by 20% to 25%, while China, India and other Asian countries will boost revenue by 10% to 15%.
"GE has doubled revenues in 27 countries in five years, and our global revenue has expanded to more than 55% of our total industrial revenue," Rice said in a speech in Brazil. "Approximately 66% of our record $200 billion backlog comes from global markets and over half from the growth regions."
Though Rice didn't discuss the U.S., the company will also benefit from a domestic economic rebound. If these forecasts prove correct, that should quiet calls from some investors for CEO Jeff Immelt to break up GE. At least that will be the case until the next economic downturn.
Jonathan Berr does not own any GE shares.
Which should be instant removal from ANY subsides, earmarks, or tax exemption ...................................................................
THOSE ARE GIFTS FROM THE AMERICAN TAXPAYER (AS COMPLETELY OPPOSED BY GE'S LAST FEW YEARS OF NO TAXES PAID) SPECIFICALLY DESIGN TO AID AMERICAN BUSINESSES DO BUSINESS IN AMERICA!
BUT SINCE OBUBU AND JEFFERY IMMELT ARE EACH OTHERS FAVORITE BUTTBOYS, HIS FREEBEES WILL EXPAND!
(WAAAAAAAAAA, WAAAAAAAAA, NOT ME, I AM INVESTED IN GE AND I WANT MY (UN)FAIR ADVANTAGE AGAINST PAYING TAXES)
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Despite its size, the IPO will create just two new members of the 10-figure club from its executive ranks. A few others could net hundreds of millions.
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