GE: Is the worst over?
The worst could be over for embattled General Electric.
JPMorgan’s Stephen Tusa, one of the most negative analysts on the company, raised his view to neutral from underweight this week. The firm has had GE as underweight, an equivalent of a sell rating, for 2 ½ years, according to Dow Jones.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| GE | GE AEROSPACE | 182.84 | +2.23 | +1.24% |
The stock has lost over 50 percent of its value in the past year and fell below the $7 level earlier this month for the first time since 2009. Investors are concerned about the company’s large debt pile and a turnaround which has failed to gain traction.
Separately GE Chairman and CEO Larry Culp, who took over in October after John Flannery was shown the door after less than two years at the helm, announced plans to establish a new, independent company focused on building a comprehensive Industrial Internet of Things software portfolio.
The company will start with $1.2 billion in annual software revenue and an existing global industrial customer base.
Additionally, GE announced an agreement to sell a majority stake in ServiceMax, a leading provider of field service management software, to Silver Lake, a leading private equity firm focused on technology investments.
"As an early leader in IIoT, GE has built a strong business with its industrial customers thanks to deep domain knowledge and software expertise," said Culp. "As an independently operated company, our digital business will be best positioned to advance our strategy to focus on our core verticals to deliver greater value for our customers, and generate new value for shareholders."
With these actions, GE will sharpen the focus of its IIoT portfolio to position the new business for future growth. The transaction is expected to close in 1Q 2019, subject to customary closing conditions and regulatory approvals, the company said in a statement.
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