Why Shares in General Electric Beat the Market Today
Shares in General Electric (NYSE: GE) were up 2% by 10 a.m. ET today, significantly outperforming the S&P 500 index. However, the reason for the move might surprise you. It's not about GE per se; instead, it's a read-across from some positive commentary on a rival coming from HSBC analysts.
The analysts upgraded Siemens Energy to a buy from a hold, citing support for the company's plans to take complete control of Siemens Gamesa – a company that, along with Vestas, is GE Renewable Energy's main competitor in wind power in the West. The analysts believe Siemens Energy can restructure Siemens Gamesa and benefit from buoyant end demand in the industry.
In recent years, all three leading players have had significant issues with soaring raw material and logistics costs. Consequently, they've suffered margin pressure, as they are executing on orders previously won under conditions of highly competitive pricing.
Source Fool.com
