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What remains of GE could be worth just $2/share after spinoffs, analyst says

Published 01/23/2019, 12:48 PM
© Reuters. What remains of GE could be worth just $2/share after spinoffs, analyst says
GE
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  • General Electric (GE +1.8%) has spun off several businesses to generate cash and shrink its footprint, but Gordon Haskett analyst John Inch thinks the company may have gone too far, cautioning that "once GE sells off its strong cash generating businesses such as Healthcare and Rail, these assets will be gone forever."
  • GE has as much as $80B in "total upcoming (pretax) business divestiture proceeds," Inch says, calculating GE's remaining liabilities at $144B-$203B and the remaining equity value between negative $2.47/share and positive $7.11/share, with ~$2 at the midpoint.
  • GE "could still end up in a precarious position," as the company's "outsized off-balance sheet liabilities" are "coupled with the company's remaining weak to negative ensuing cash flow," Inch writes.
  • The firm has an Underperform rating and $7 price target on GE shares.
  • Now read: General Electric: The Road To Junk Status


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