Citigroup Reiterates Buy Rating, $25 PT on General Electric Company on Announced NBCU Sale
In a report published Wednesday, Citigroup reiterated its Buy rating and $25.00 price target on General Electric Company (NYSE: GE).
Citigroup noted, “Buy-rated GE announced an agreement to sell its remaining 49% stake in NBCU plus NBCU real estate properties to Comcast for $18.1 billion, accelerating its timeline for exiting this non-core business. After-tax cash proceeds of $13.5 billion are expected to be used for $10 billion of share buybacks and for accelerated Industrial restructurings. GE boosted the buyback and now has $23 billion remaining (implied 10% of sharecount at current prices). News of the early exit should not be a surprise. GE had clearly signaled its preference to accelerate the original timeframe from the Dec 2009 agreement with Comcast, which had called for GE to sell half its remaining stake in July 2014 and the remainder in 2018. We believe the sale price represents a valuation in this negotiated transaction of roughly 10x EBITDA, consistent with the redemption schedule.”
General Electric Company closed on Tuesday at $22.58.
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