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(GE) is accelerating efforts to return its flagship power segment to profitability this year, a Wall Street analyst said. GE stock rose.XTurning around GE Power is CEO Larry Culp's top stated priority, alongside reducing massive debt. The power unit especially weighed on GE stock as it slid to nine-year lows last year, and continues to raise alarm on Wall Street.As recently as May, JPMorgan analyst Steve Tusa had warned General Electric is losing market share in a "stable" gas turbine market and not "telling the whole story" about its power business.But after visiting company headquarters last week, William Blair analyst Nicholas Heymann came away impressed. He wrote Wednesday that GE Power's turnaround efforts are in "overdrive," with Culp spending a "disproportionate" amount of time changing how the unit is fundamentally managed, not just operationally right-sized.40%-60% Upside To GE Stock SeenGE Power sees free cash flow improving in 2020 and turning positive in 2021 on the back of steady earnings growth, as the power market stabilizes, according to Heymann.The analyst noted key GE Power supplier Woodward (WWD) now sees a likely upturn in demand for gas turbine parts in late 2019 vs. its earlier projection for 2020.Heymann added that the turnaround of GE Power "is now being implemented at an accelerated pace ... Mr. Culp is driving to complete a large portion of the transformation in how GE Power is managed as soon as possible, to enable the business to maximize the benefit from the next upturn in demand for industrial gas turbines."As confidence in GE's turnaround grows, he believes GE stock could significantly outperform the market over the next 12 months, rising to 14-16 or higher, from just around 10 a share currently.In March, Culp called 2019 a "reset year" while warning its industrial operations could burn up to $2 billion in cash in 2019 and setting earnings targets below Wall Street's estimates. But the CEO also said that month he sees project Power returning to profitability this year, amid modest growth in gas generation around the world.GE Stock Forms A Base With FlawsShares of General Electric closed up 0.3% at 10.31 on the stock market today, holding above the 50-day and 200-day moving averages. While shares are forming a base with a potential 11.85 buy point, the entry is well low prior highs. Dow Jones
industrial rival United Technologies (UTX) edged up 0.6%, better than the 0.4% gain for the Dow index as a whole.The relative strength line for GE stock has been moving sideways since February, a sign it's neither leading nor lagging the market. The RS line tracks performance against the S&P 500.The Industrial Select Sector SPDR ETF (XLI) added 0.5% and the Vanguard Industrial ETF (VIS) 0.4%.Find Aparna Narayanan on Twitter at @IBD_ANarayanan.YOU ALSO MIGHT LIKE:Is GE Stock A Buy Right Now? Here's What Earnings, Chart SayBest Growth Stocks To Buy And Watch: See Updates To IBD Stock ListsIBD Digital: Unlock IBD's Premium Stock Lists, Tools And Analysis TodayIs Boeing Stock A Buy Right Now? This Is What You Need To KnowThe post GE Stock Rises As Power Turnaround Efforts Hit 'Overdrive': Analyst appeared first on Investor's Business Daily. Weiter zum vollständigen Artikel bei "Investors Business Daily"
Quelle: Investors Business Daily