3 Reasons To Buy GE, According to UBS
Shares of General Electric Company (NYSE: GE) dipped below the $10 per share mark for the first time in nearly a decade, but UBS sees three reasons why investors can now be buyers.
The Analyst
UBS' Steven Winoker upgraded General Electric from Neutral to Buy with an unchanged $13 price target.
The Thesis
The bullish case for GE's stock can be made at a time of low expectations and is backed up by three potential catalysts, Winoker said in a note.
- GE CEO Larry Culp is a capable leader that can improve the business through optimizing capital allocation and "cleaning up whatever needs to be cleaned up."
- The downside risk to GE's stock is $8 per share, which would include more than $47 billion in "Remainco" liabilities, valuing the Power business below $4 billion, higher levels of restructuring, and lower valuation for the Aviation and Healthcare businesses. Given a downside potential of $8 per share but upside potential to $13 per share, the stock is trading with a more favorable risk to reward profile.
- It's reasonable to assume at this point "peak uncertainty" has passed and investors can looking forward to corporate events that can improve visibility and bolster up the balance sheet.
Price Action
Shares of General Electric were trading lower by 1.4 percent at $10.04.
Related Links:
Barclays Says It's Time To Reconsider General Electric's Stock
GE Grabs A Pair Of New Upgrades Following CEO Change
Photo courtesy of GE.
Latest Ratings for GE
| Date | Firm | Action | From | To |
|---|---|---|---|---|
| Mar 2022 | RBC Capital | Maintains | Outperform | |
| Mar 2022 | Credit Suisse | Maintains | Outperform | |
| Feb 2022 | Morgan Stanley | Maintains | Overweight |
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