GE poised for growth in energy market
Backed by scale, technological advancement and brand presence, the company's energy division stands to gain share in coming years.
The company is the largest supplier of energy-related equipment in the United States. But it has been witnessing strong competition internationally, particularly from Chinese manufacturers such as Sinovel Wind Group and Goldwind in the wind turbine market. GE also competes in the solar industry with companies such as First Solar (FSLR), SunPower (SPWRA) and Suntech Power (STP).
Backed by scale, technological advancement and brand presence, we expect GE's energy division market share to improve in the coming years.
A diverse product portfolio
GE offers a diverse set of equipment and services across the entire sector, including gas turbines, wind and solar energy, water technology and distributed power-generation technologies. The company continues to invest in market-leading technology and services. As part of the U.S. Department of Energy's Sunshot initiative, GE is working to make solar photovoltaic systems on rooftops more affordable for homeowners.
Internationally, GE recently debuted a 2.75 megawatt wind turbine technology in Scotland. This technology is developed to suit a variety of wind regimes, and is the latest in the company's portfolio of multi-megawatt wind turbines.
Historically, the company has invested 4% to 5% of segment revenue in research and development. Its strong portfolio and commitment to producing the most technologically advanced products should allow for market share growth.
Global presence in developed and emerging economies
The company's presence in Asia and other growing markets makes it well-positioned to capture a large share of equipment and service orders from these regions.
In March, GE signed an agreement to work with Vietnam's National Power Transmission Corporation to increase the country's power transmission efficiency and reduce the risk of power shortage.
While we estimate that GE's energy market share will increase from an estimated 13.2% in 2012 to 14% by the end of our forecast period, Trefis members* project an increase from 14.5% in 2012 to 17.2% during the same period. The members' estimates imply an upside of 6% to the Trefis price estimate for GE's stock.
We currently have a Trefis price estimate of $20 for General Electric's stock, about 20% above the current market price.
Trefis members constitute more than tens of thousands of users of the Trefis platform, inclusive of investors, financial analysts, and business professionals who use the Trefis platform to create their own models and price estimates.
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
It's time for a reality check in advance of the Chinese e-commerce giant's much anticipated initial public offering.
VIDEO ON MSN MONEY
Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.
Contributors include professional investors and journalists affiliated with MSN Money.
Follow us on Twitter @topstocksmsn.