What is General Electric (GE) Worth?

Once considered a venerable blue chip stock, the credit crisis exposed General Electric's (NYSE: GE) mortality. The madness which started in 2007 saw GE shares enter into free fall, before recovering over the past year. The crisis also saw the company cut its hefty dividend to a fraction of what it once was.

Much of the concerns about GE has centered around the Capital Finance unit, which provides commercial lending and leasing in addition to consumer lending and real estate. With defaults and delinquencies surging and with no end in sight, shares of GE plunged. The concerns about the finance unit were so great that shares traded to as low as $5.87 on March 4th - a year ago tomorrow. This was down from the $30s before the crisis hit.

Some were calling GE shares worthless. One analyst even placed a low $2 per share target on the stock.

With the settling down of the credit crisis, due to massive stimulus from the U.S. and countries around the world, these bearish calls proved to be a bottom for the stock and they have since recovered 175% to their current price of $16.19 per share.

While GE is clearly not out of the woods, with earnings returning to normal levels, regular valuation metrics appear to be proper again. So what should the stock of GE be worth now?

Currently the shares trades at 16.4x the 2010 EPS consensus of $0.99 and 13.5x the 2011 EPS consensus of $1.20.

Here is what analysts are saying on the stock's value:

• Goldman Sachs thinks the stock is worth $21 per share, based on 16.5X 2011 Industrial EPS of $0.95 and 1.5X GECS tangible book value of $3.60. They rate the stock a Buy.
  
• JP Morgan has a price target of $22, based on 12x normalized (2013E) earnings of $1.80. The note shares of GE currently trade at 9x their normalized 2013 EPS estimate of $1.80, or a a 25% discount to EE/MI peers. They rate the shares Overweight.
  
• Deutsche Bank has a $19 price target on GE. They said a DCF-based model values the industrial businesses at $16 and they continue to value GE Capital at $3 per share based on a multiple of 1.2x TBV ($38b). They rate the shares Hold.