General Electric Company(GE): Are Industrials The Next Biggest Market Movers?

industry2: The industrial sector has lagged an otherwise hot market, but many strategists are looking to it as the next market mover. Improving confidence and an expectation of improving economic growth through the end of this year could make this sector the next big winner.

Industrials have been lackluster to say the least, held back by slowing in the emerging markets and a recession in the EU, but analysts are looking for 11% earnings growth in that sector next year. With improving economic projections for 2014, this slow poke of the market looks to be the best place for the second half of 2013 and 2014.

Despite improving economic numbers this year, industrials have only run up a fraction of other sectors like small companies, consumer discretionary and financials.

Barron’s recently ran a screen of 61 industrial stocks from the S&P 500 looking for companies that have not followed the broad market up and those that would get a boost by improving economic conditions. The names that jumped out were Caterpillar Inc.(NYSE:CAT),Textron Inc.(NYSE:TXT) and General Electric Company(NYSE:GE).

Analysts have put a target of $110 on CAT, based on earnings estimates improving from $7.25 per share to $8.17 in 2014.

Textron has been held back by weak sales from its private jet division, Cessna, but that is expected to turn around next year. Analysts are looking for as much as a 50% increase in earnings, driven by the aging of the existing jet fleet, which means the number of used aircraft is

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