【出版时间及名称】：JPM-GENERAL ELECTRIC CO.-LOCKED AND LOADED-THE CASE FOR GE AS A MOMENTUM PLAY-100316
      【作者】：jpmorgan
      【文件格式】：pdf
      【页数】：26
      【目录或简介】：
We believe that, for the first time in over 10 years, the pieces are in place for earnings
upside, a key to moving GE from value to momentum.
• GECS not just a credit story . . . Investor focus remains on credit losses, an
intuitive factor that moves with the economy. We believe losses are peaking and
should begin to decline in mid 2010, and depending on the economy, we could see a
rapid decline to normal levels in 2013, which would provide an estimated tailwind
of $0.90 per GE share.
• . . . as NIM locked and loaded, on the cusp of improvement in years ahead . . .
Less obvious are the dynamics around portfolio margin, where GE benefits from
cheap credit and limited competition. Guidance currently calls for a margin of ~5%
in 2010, up only 40 bps. We see upside to this margin in 2011, and, by 2013 a
potential ~$3B of tailwind.
• . . . driving upside to GECS earnings. Putting it all together, we estimate GECS
can do $2B in 2010 and $4B (more fully taxed) in 2011 versus 2010 guidance of
~$1.75B. The bottom line is that we still see normalized GE earnings of ~$2 in
2013, though the trajectory, especially at GE Capital, is likely to be more front end
loaded, a positive.
• Industrial: services backlog robust, especially at Aviation where macro
environment is improving . . . The 10K showed a Tech Infrastructure services
backlog scheduled for delivery stronger than expected at $11.9B vs. $9.2B
estimated a year ago, mostly from Aviation, a positive. Peer comments support
upside in the highly profitable aircraft services business (~15% EPS).
• . . . while other businesses stable, and slowly turning. Energy, Healthcare, and
even Transportation have moved from the “deteriorating” camp to "stable." We see
all-in Industrial profit growth at a conservative 10% in 2011.
• All in, upside vs. Street