March 6 (Bloomberg) -- General Electric Co. rose in New York trading as analysts for Sanford C. Bernstein & Co. and Merrill Lynch & Co. said the company has adequate capital for its finance arm.
GE, which has fallen for five straight days, rose 21 cents, or 3.2 percent, to $6.87, at 12:01 p.m. in New York Stock Exchange composite trading. The shares have fallen 79 percent in the past 12 months.
The company’s industrial businesses are still expected to generate several billion dollars in profit that could be injected into GE Capital, Merrill Lynch analyst John Inch wrote in a report today. Sanford Bernstein’s Steven Winoker wrote that GE Capital will have adequate minimum capital.
“I would like to believe our base case scenario,” Winoker said in an interview on Bloomberg Television today. “Because of the ability for them to account for their book over a long period of time, they don’t actually have to take a lot of those losses, and if they don’t take the losses it doesn’t reduce their tangible common equity.”
Winoker rates the shares “market perform” and Inch rates GE “neutral.”
“Despite the market’s concern, we believe GE may ultimately not have to raise additional capital, although admittedly this may not leave GE with much of a cushion,” Inch wrote in a report today.
GE raised $15 billion in October, including $3 billion in preferred stock sold to Warren Buffett’s Berkshire Hathaway Inc., on top of measures such as suspending a share buyback.
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