GE (GE) Has Little Nuclear Liability in Japan Says Citi (C)

Even though General Electric (NYSE:GE) designed the six nuclear reactors at the Fukushima Daiichi facility in Japan, and of those three have been struggling, that won't generate much liability for GE, as Japanese law places liability and responsibility on the operators of the plants and the government, according to Citigroup (NYSE:C).

Operators of nuclear facilities in Japan are the ones that carry the insurance, placing recourse on them if there is any blame to be had.

Citi analyst Deane Dray wrote, “We consider GE’s share price pressure, down 3%-4% (vs -1.6% for the MI-EE sector) to be excessive given its limited financial responsibility for damages related to the nuclear failures, and within the context of its relatively small (3% of sales) contribution from nuclear markets. We believe the share price reaction reflects headline risks rather than an accurate assessment of GE’s financial exposure. There may also be an element of profit-taking, given that GE was up 11% YTD coming into today, tied with ROP as the best performing stock in the sector.”

General Electric closed Monday at $19.92, down $0.44, or 2.16 percent.