Goldman Sachs Identifies General Electric Stock as 'Top Idea'

The security sports attractively priced premiums at the moment

Digital Content Manager
Jun 29, 2021 at 10:06 AM
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General Electric Company (NYSE:GE) is garnering some positive attention this morning, after Goldman Sachs classified the equity as a "top idea." The analyst in question had a positive view of the company's cash flow prospects, amid the recovery of the industrial sector. The firm currently rates the stock a "buy" with a $16 price target, which is a roughly 24% premium to Monday's close. At last check, GE is up 1.7% to trade at $13.11.

The majority of analysts are already bullish towards GE. Of the 12 analysts in question, seven call it a "buy" or better rating, while the remaining five carry a tepid "hold" rating. Echoing this, the 12-month consensus target price of $14.97 is a 14.5% premium to current levels.

The options pits are similarly optimistic. This is per the stock's 10-day call/put volume ratio of 6.07 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which sits higher than 71% of  readings from the past year. In other words, long calls are getting picked up at a faster-than-usual pace.

Those wanting to get in on GE's next move with options are in luck, as premiums on the stock are affordable at the moment. This is per the equity's Schaeffer's Volatility Index (SVI) of 29%, which sits in the 4th percentile of readings in its annual range. This means options players are pricing in low volatility expectations right now.

General Electric stock is just now cooling off from a close attempt to overtake its March 9, three-year high of $14.41. The shares seem to have found their footing at the $12.80 level, however, and have had the support of the 120-day moving average since last October. In the past nine months, GE has added 110.6%.

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