Stephen A. O'Neil in a client note reduced his rating to "Long-term Buy" from "Buy" following a recent rise in the stock, which hit a five-year high this week. That means the analyst expects the stock to offer solid returns, but not within the next 12 months.
In the next two to three years, the analyst said he expects shares to rise to $53, and he cited the company's booming infrastructure segment for the growth outlook.
The Fairfield, Conn., company makes aircraft engines and medical equipment, owns broadcasting operations and has interests in lending, asset management and reinsurance, among other operations.
"We remain upbeat in our outlook for 2007 and beyond," wrote O'Neil.
GE shares gained this week partly due to a positive analyst meeting and strong order trends from the Paris Air Show. In addition, GE said it paid $603 million for its stake in Regency Energy Partners LP, a natural gas processor and distributor.
In afternoon trading, GE shares lost 9 cents to $38.70.
Questions or comments about this story should be directed to Shaila Dani at 212-621-7190.
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