General Electric's (GE) Brexit-triggered selloff Friday outpaced that of many of its industrial rivals, despite a comparatively less risky exposure to a U.K. departure from the European Union revealed by a stress test created by analysts with Stifel.
GE shares dropped 3.4% in early morning trading Friday, off news that Britain's "Leave" campaign won a majority in Thursday's referendum, while rivals 3-M (MMM) and United Technologies (UTX) each fell 2.6%, and 3-M (MMM) dropped 2.5%. (GE is a stock held in Jim Cramer's Action Alerts PLUS charitable trust.)
"Throughout the day and in the coming days, we will be revisiting our plays offering the most yield (stable, steady income), as their relative attractiveness has only been augmented by the flight to safety," Cramer said in a Friday report, specifically citing GE along with fellow Action Alerts PLUS investments Cisco (CSCO), Dow Chemical (DOW) and American Electric Power (AEP).
Of GE's $108.8 billion of expected sales this year, 15% are tied to Europe and 1.5% appear to be jeopardized by a U.K. departure from the bloc, Stifel analysts said in their stress test report. Meanwhile, 2.7% of United Technologies sales are in jeopardy, followed by 2.2% of Honeywell's and 1.7% of 3-M sales, according to the forecasts.
GE is just over a year into CEO Jeff Immelt's effort to unwind long-time finance arm GE Capital, the unit largely responsible for pulling GE into the 2008 financial crisis, and for its comparatively stagnant recovery.
Immelt has simultaneously counterbalanced his more than $150 billion of financial asset divestitures with industrial megadeals, such as last November's $10.3 billion purchase of French turbine maker Alstom's (ALSMY) grid businesses, marking GE's largest acquisition in its 124-year history.
Shares of General Electric are up 11% over the past 12 months.