How GE Is Using Disruptive Tech To 'Reinvent How To Lift Growth'

In a report rolled out Wednesday, William Blair analysts Nicholas Heymann and Brendan Shea look into General Electric Company

, which they see is "Infusing Disruptive Technology and Predictive Analytics to Reinvent How to Lift Growth." They reiterate a Market Perform rating and a $29 price target on the stock. While many are aware of the multiple changes that GE is making to its business portfolio, few know about the "under the hood" innovation taking place. "GE is moving far beyond simplifying its operations to reduce costs by reinventing how it leverages technology throughout its organization in the context of its products, manufacturing and service processes, and how it captures, analyzes, and generates predictive insights from data analytics," the report explains. The analysts point out that a new 2014 cross-functional management incentive program helps guarantee that relevant technology innovations reach and permeate all sectors of the company. This is expected to increase the value of its products and services, enabling the company's gross margins to steadily widen, "even in a slow growth environment." GE estimates that its gross margin (26.5 percent in 2014) could increase by 50 basis points over 2015 thanks to this new approach. "Disruptive technology can be profitable by sharing the cost of core production processes and technology across numerous product platforms."