By Sai Sachin Ravikumar and Ankit Ajmera
March 7 (Reuters) - General Electric Co, which wasthe most valuable publicly traded
Valued at close to
At one point last week, the gap between GE and fellow
Helping to narrow the gap is a 45 percent slide in GE stockover 2017 and a 16 percent fall this year.
Driven in value by a series of investments in severalsectors during the 1990s, GE is now paying the price forfocusing outside its traditional industrial manufacturing turf,while its rivals have enjoyed a more steady ascent thanks to asharper focus on their industrial roots.
"All the large-cap diversified industrials like Honeywell,United Technologies and 3M to name a few, have benefited fromsome of the money that's come out of GE," said JPMorgan analystSteve Tusa, who has a five-star rating on Thomson Reuters Eikonfor recommendation performance.
"You're really talking about maybe a mid-teens stock at 2020...
Tusa rates GE's stock "underweight" with a price target of
But some analysts are optimistic about GE's stock and futureprospects.
William Blair & Co analyst Nicholas Heymann believes thatthe worse could be over for GE, and its shares are likely tobegin stabilizing before moving higher as 2018 progresses.
"I think GE shares have been a bit oversold due to excessivefears about liquidity," Heymann wrote in a note.
Heymann cites higher oil prices, improving performance ofGE's aviation and healthcare businesses, and the recentnomination of three "exceptionally talented" directors to GE'sboard. He has an "outperform" rating on the stock.
GE shares slid even after the company replaced Jeff Immeltas CEO last August with John Flannery. His turnaround plan,which includes cutting jobs, slashing GE's dividend and apossible break-up of the conglomerate, is likely to take a yearor more to show results.
When Immelt took over in September 2001, GE was the mostvaluable
Over Jack Welch's stint as CEO from 1981 to 2001, GE's valuerose from
GE's stock trades at roughly 14 times its forecastedearnings, well below the multiples of its peers, as the graphicbelow shows. The number helps investors gauge the value of acompany relative to its earnings.
Honeywell's stock also rose around 32 percent in 2017, asthe company sold more aircraft parts and as its energy customersbought more industrial equipment. Its warehouse automationequipment and software benefited from an ecommerce boom.
"We like Honeywell, given a solid management team andexposure to end markets we favor," said Richard Grasfeder, aportfolio manager at Boston Private Wealth LLC, which holdsabout 787,600 shares in GE as of the end of 2017.
United Tech, which sells the Pratt & Whitney jet engines,has a "significant long-term advantage" over GE, Grasfeder said.
"We think United Tech could provide learning points for GEmanagement and investors," Grasfeder said. "Good leadership iscritical."
(Reporting by Sai Sachin Ravikumar and Ankit Ajmera; Additionalreporting by Ankur Banerjee; Editing by Patrick Graham, BernardOrr)