Analyst Update: General Electric, B/E Aerospace, Salesforce

Analysts are weighing in on GE, BEAV, and CRM

Dec 2, 2014 at 1:36 PM
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U.S. markets are higher this afternoon, as Wall Street responds positively to the latest round of economic data. Meanwhile, among equities in focus are blue chip General Electric Company (NYSE:GE), aircraft specialist B/E Aerospace Inc (NASDAQ:BEAV), and cloud concern Salesforce.com, inc. (NYSE:CRM), which have all received the attention of analysts.

  • GE is up 0.4% at $26.13, after Goldman Sachs boosted its price target on the shares to $28 from $27 -- but underscored its tepid "neutral" rating. Today's positive price action marks a change of pace for GE, which is down 6.8% year-to-date. Option traders have been rolling the dice on additional losses, too, as evidenced by the equity's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 0.61, which ranks just 7 percentage points from an annual bearish peak. Echoing this put-skewed trend is General Electric Company's Schaeffer's put/call open interest ratio (SOIR) of 0.96, which sits higher than 83% of similar readings taken in the past year.

  • Ahead of tomorrow's inaugural trading of when-issued shares of its spin-off, KLX Inc., BEAV received price-target cuts from J.P. Morgan Securities (to $85) and Oppenheimer (to $91), while Credit Suisse raised its target price to $94. All three brokerage firms maintained their equivalent of an "outperform" rating. On the charts, BEAV has struggled since topping out at an all-time high of $101.13 in early May, with the shares off 22% to trade at $78.87. More recently, the equity has encountered a stern level of resistance at its 80-day moving average -- currently located at $80.14 -- with this trendline containing today's advance. Amid this longer-term downtrend, option players have been quick to place bearish bets. In fact, B/E Aerospace Inc's 50-day ISE/CBOE/PHLX put/call volume ratio of 1.02 ranks in the 95th percentile of its annual range. Simply stated, puts have been bought to open over calls with more rapidity just 5% of the time within the past year.

  • J.P. Morgan Securities weighed in on CRM -- calling the company a "trailblazer," and initiating coverage of the stock with an "overweight" rating and a $74 price target. Not only does this represent expected upside of almost 26% to the stock's current perch at $58.75, but sits in territory yet to be charted. With CRM boasting a roughly 14% year-over-year gain, today's bullish brokerage note echoes the general consensus seen on the Street. Of the 27 analysts covering Salesforce.com, inc., 23 maintain a "buy" or better rating, versus three "holds," and just one "sell." Meanwhile, the average 12-month price target of $70.49 stands at a nearly 20% premium to present trading levels.

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