Skip to main content

Market Overview

UBS Sees 60% Upside For GE Stock

Share:
UBS Sees 60% Upside For GE Stock

General Electric Company (NYSE: GE) investors received some much-needed good news Monday when one Wall Street analyst said the battered stock is an excellent long-term buy.

The Analyst

UBS analyst Steven Winoker reiterated a Buy rating on GE with a $13 price target.

The Thesis

The critical issue for GE moving forward is the company’s debt and leverage, Winoker said in the note. (See his track record here.) 

A strategy of asset sales, industrial free cash flow stability and rolling forward pension and operating leases could get GE’s leverage down to about three times in two years’ time and two times by 2022, the analyst said. 

UBS' projections assume GE will successfully divest its remaining stake in Baker Hughes A GE Co (NYSE: BHGE) in 2019 and GE Healthcare in 2020, with 80 percent of the spin-off retained by GE shareholders. Winoker said he expects the health care spin-off will take on $18 billion in gross debt. Finally, GE’s Industrial segments will have to shoulder the cash flow burden of paying GE Capital’s upcoming near-term debt obligations, he said. 

The GE recovery process will likely be slow and volatile, but the company has plenty of additional levers to pull to improve its financial situation and provide strong returns for investors over time, Winoker said. The company’s financial flexibility has not been reflected in the stock’s 34.2-percent decline in the past month, he said. 

“While GE has been under considerable pressure lately, we maintain our conviction that the stock presents a long-term capital appreciation opportunity." 

Price Action

GE shares were down 1.81 percent at $7.88 at the time of publication Monday. 

Related Links:

Jim Cramer's Ways To Spot A Dividend Cut Coming

Things Are Going From Bad To Worse For GE

Latest Ratings for GE

DateFirmActionFromTo
Mar 2021Deutsche BankMaintainsHold
Mar 2021OppenheimerDowngradesOutperformPerform
Mar 2021Morgan StanleyMaintainsOverweight

View More Analyst Ratings for GE
View the Latest Analyst Ratings

 

Related Articles (GE)

View Comments and Join the Discussion!

Posted-In: Steven Winoker UBSAnalyst Color Price Target Reiteration Top Stories Analyst Ratings Best of Benzinga

Latest Ratings

StockFirmActionPT
SPGIBMO CapitalMaintains428.0
INFOBMO CapitalMaintains110.0
RHCowen & Co.Maintains680.0
LRCXCowen & Co.Maintains700.0
ANTMCowen & Co.Maintains395.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
SPAC
Everything you need to know about the latest SPAC news.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com