CORRECT: General Electric's Stock Leads Dow Gainers After Bernstein Turns Bullish

By Tomi KilgoreMarketsMarketWatch Pulse

Shares of General Electric Co. rallied 1.4% in morning trade Friday, to pace the gainers in the Dow Jones Industrial Average , after Bernstein returned to its bullish stance on the diversified industrial giant, citing favorable valuation and increased comfort the outlook for earnings growth. Analyst Steven Winoker raised his rating to outperform, after being at market perform for the past eight months. He raised his stock price target to $40, which is 26% above current levels, from $33. Winoker said he was bullish about GE's plan to simplify its business portfolio, and its potential for earnings growth, but had downgraded it in April because the stock had gotten ahead of itself. Given that GE's stock has underperformed its peers and the broader stock market by a wide margin this year although the fundamental outlook hasn't changed, the stock has become attractive again. "Yes GE is often unloved, but the changes are big and they have come fast and furious in the last 3 years," Winoker wrote in a note to clients. "Our discussions with GE leadership across the segments give us increased confidence in their ability to execute from here, including on earnings and cash." The stock has edged up 1.7% year to date, while the SPDR Industrial Select Sector ETF has soared 19% and the Dow has rallied 14%. (This replaces an earlier item that incorrectly reported when Winoker had downgraded GE.)

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