- General electric The stock jumped on Monday after Barclays said that the stock could have greater growth potential amid restructuring plans under the new CEO, Larry Culp.
- “Even the most fierce skeptic might want to reconsider the issue of changing the CEO,” said Barclays.
- Follow GE trading here in real time.
General electric shares rose more than 3% on Monday after Barclays said that shares could have greater growth potential amid their restructuring plans under the leadership of new CEO Larry Culp.
In a note titled “Phoenix May Be Getting Out of the Flame,” Barclays analyst Julian Mitchell wrote: “Even the most bitter skeptic might want to reconsider after a change of CEO.” He raised GE to “overweight,” while maintaining his target of $ 16 per share. He says that the blue sky scenario, in which Culp aggressively wraps the company, will force the stock to pass for $ 20.
“We believe that the growth potential in stocks is now significant when the external executive director was created, which significantly expands the range of opportunities that can be realized at GE, both in terms of restructuring rates and in broader strategic options,” he said note to customers on Monday.
Mitchell expects the company to redefine its business in the fight against large cost reductions, improve his cash flow, and potentially release equity, if there is “a real risk that a substantial portion of the $ 40 billion net credit lines should be used.”
GE shares have risen by almost 7% since last week after the company announced that it displaced CEO John Flannery and replaced it with Culp.
Last week, the credit rating agency Moody & # 39; s stated that it placed General Electric and its subsidiary GE Capital Global Holdings "Target =" _ blank "in the review to downgrade" after the company warned that it will miss its income from 2018 in the amount of from 1 to 1.07 dollars per share.
“While we still don’t know the extent of the reduction in management in 2018, talking with investors, we believe that they are mainly tied to EPS in the amount of $ 0.75 for 2018, FCF – $ 0.50, and dividend revenue is 75% +, ”said Mitchell.
This year GE shares fell by more than 25%.