DES MOINES, Iowa (AP) -- Shares of General Electric Co., which designed the nuclear reactors crippled by last week's tsunami, slid Tuesday as authorities ordered 140,000 residents nearby to seal themselves inside their homes.
Prime Minister Naoto Kan said radiation had spread from the four stricken reactors of the Fukushima Dai-ichi nuclear plant along Japan's northeastern coast.
Almost every company with ties to the nuclear industry has been battered this week with investors fearing that the fallout from a potential nuclear disaster has derailed a rebound for this particular energy sector.
Still, Citi analyst Deane Dray said Monday that the downward slide in GE shares was an overreaction since the company's financial exposure is limited.
"We believe the share price reaction reflects headline risks rather than an accurate assessment of GE's financial exposure," Dray wrote.
The liability for the failure of the three reactors that were functional when the earthquake occurred would fall on the power plant operators, who insure the facility, and the government, not GE, Dray said.
Power providers in Japan have said they may pursue damages if they are sued.
However, GE is an enormously diverse company and earlier this year reported that in the fourth quarter while income from energy infrastructure fell, profits from technology infrastructure, entertainment, financing and home improvement rose.
And Dray said GE may actually see increased sales for gas turbines as Japan seeks generators to supply power in the short term.
Gas turbines are GE's largest energy business, representing about 7 percent of total revenue.
Dray maintained the GE price target at $25 and said at current prices, GE is attractive.
GE shares fell 56 cents, or 2.8 percent, to $19.36. They were trading above $20 a share on Friday and fell below $19 for a while Tuesday.
Shares have traded between $13.75 and $21.65 in the past 52 weeks.
Prime Minister Naoto Kan said radiation had spread from the four stricken reactors of the Fukushima Dai-ichi nuclear plant along Japan's northeastern coast.
Almost every company with ties to the nuclear industry has been battered this week with investors fearing that the fallout from a potential nuclear disaster has derailed a rebound for this particular energy sector.
Still, Citi analyst Deane Dray said Monday that the downward slide in GE shares was an overreaction since the company's financial exposure is limited.
"We believe the share price reaction reflects headline risks rather than an accurate assessment of GE's financial exposure," Dray wrote.
The liability for the failure of the three reactors that were functional when the earthquake occurred would fall on the power plant operators, who insure the facility, and the government, not GE, Dray said.
Power providers in Japan have said they may pursue damages if they are sued.
However, GE is an enormously diverse company and earlier this year reported that in the fourth quarter while income from energy infrastructure fell, profits from technology infrastructure, entertainment, financing and home improvement rose.
And Dray said GE may actually see increased sales for gas turbines as Japan seeks generators to supply power in the short term.
Gas turbines are GE's largest energy business, representing about 7 percent of total revenue.
Dray maintained the GE price target at $25 and said at current prices, GE is attractive.
GE shares fell 56 cents, or 2.8 percent, to $19.36. They were trading above $20 a share on Friday and fell below $19 for a while Tuesday.
Shares have traded between $13.75 and $21.65 in the past 52 weeks.