Wall Street not yet excited about GE


An analyst’s upgrade and speculation about what Vivendi will do with its 20% stake in NBC Universal has not gotten traders excited about General Electric.

GE’s stock closed barely higher on Monday, up 26 cents, despite an upgrade from Morgan Stanley analyst Scott Davis. His analysis dealt mostly with the company’s GE Capital operations, concluding that it has loan losses much lower than those assumed by some investors.

But much of the interest lately in GE has concerned the future of its 80%-owned NBC Universal. The 20% owner, Vivendi, is asked every year what the company plans to do as its annual window opens where it has an option to sell its stake. Asked what he will do, Vivendi CEO Jean-Bernard Levy said last week that the holding is non-core, but that his company has not yet made a decision about what to do when its option window opens from November 15 to December 10.

That was maybe slightly different from a year ago, when Levy hinted that Vivendi might someday want to own all of NBCU, if it became possible. Since the company recently cut a $2.9 billion deal to by a Brazilian telecom company, Vivendi is not currently in a position to make another big acquisition.

But while Vivendi could put its stake to GE this year, many analysts consider that unlikely. The New York Times estimated that NBCU is currently worth about $35 billion, so Vivendi’s 20% would be about $7 billion. But with media stocks still beaten down on Wall Street, that value could be considerably higher when the window opens in 2010. Also, the final window isn’t until 2016.