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General Electric Company (NYSE:GE), Eaton Corporation (NYSE:ETN) – Gordon Haskett’s John Inch On Why General Electric Is ‘Very Overvalued’

General Electric Co (NYSE: GE) shares have rallied 160{41490b4d0cf0dbc5ec3f65e11fff509c7d6ed2a53a838ebf7adf43f0908f07f3} in the last 11 months, leading them to become “very overvalued,” Gordon Haskett senior analyst John Inch said Tuesday on Benzinga’s “PreMarket Prep” show. 

The problem is with GE being valued at under 3{41490b4d0cf0dbc5ec3f65e11fff509c7d6ed2a53a838ebf7adf43f0908f07f3} pre-cash yield, the analyst said.

“If everyone were valued at GE’s valuation, all these other stocks would be going up 25{41490b4d0cf0dbc5ec3f65e11fff509c7d6ed2a53a838ebf7adf43f0908f07f3}.” 

“PreMarket Prep” producer Spencer Israel asked about the 8-1 reverse split that the GE board recommended.

Inch replied that the company did not have a good response as to why it is doing the split.

“It’s kind of odd,” he told Benzinga, adding that he expects the split to take place by the end of 2021.

Competitively, the company’s products are pretty good, Inch said, but the problem for GE is the amount of its outstanding debt.

The Gordon Haskett analyst has a Hold rating on General Electric with an $11 price target. 

Related Link: If You Invested $1,000 In General Electric Stock One Year Ago, Here’s How Much You’d Have Now

Benzinga’s Israel asked Inch if he had a favorite name as it relates to President Joe Biden’s infrastructure plan.

“That would be Eaton Corp PLC (NYSE: ETN),” the Gorden Haskett analyst said.

The company has a 30{41490b4d0cf0dbc5ec3f65e11fff509c7d6ed2a53a838ebf7adf43f0908f07f3} market share and is the largest low-voltage electrical equipment supplier in Canada and the United States, he said.

Watch Benzinga’s full interview with John Inch in the clip below.

Eaton gets the double benefit of its favorable positioning based on its electrical businesses, and as an Irish company, it will not have to pay higher corporate taxes the way that everyone else will have to, Inch said. 

GE, ETN Price Action: Eaton shares were down 1.58{41490b4d0cf0dbc5ec3f65e11fff509c7d6ed2a53a838ebf7adf43f0908f07f3} at $139.06 at last check Tuesday. General Electric shares were down 0.7{41490b4d0cf0dbc5ec3f65e11fff509c7d6ed2a53a838ebf7adf43f0908f07f3} at $13.50. 

Related Link: Why Tim Quast Likes CCIV, Eaton, Disney, Palantir Stock

PreMarket Prep is a daily trading show hosted by prop trader Dennis Dick and former floor trader Joel Elconin. You can watch PreMarket Prep live every day from 8-9 a.m. ET Benzinga’s YouTube channel, and the podcast is on SpotifyiTunesGoogle PlaySoundcloudStitcher and Tunein.

Photo by Bubba73 via Wikimedia

Latest Ratings for GE

Date Firm Action From To
Mar 2021 Deutsche Bank Maintains Hold
Mar 2021 Oppenheimer Downgrades Outperform Perform
Mar 2021 Morgan Stanley Maintains Overweight

View More Analyst Ratings for GE

View the Latest Analyst Ratings

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