GE Stock is a buy because the "resurrection" of the company is on the right track

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General Electric

shares (symbol: GE) follows the market down Monday, but William Blair argues that society's improved accountability culture is already paying off – and will continue to support more equity gains.

The story back. GE shares have risen more than 28% since the beginning of the year, thanks to new management, continued debt reduction and the sale of assets, movements that, for Many investors have overshadowed some of the lingering problems that have weighed so heavily on the stock in recent years.

What's up. Monday, analyst William Blair Nicholas Heymann reiterated the Outperform rating awarded to GE following its meetings with the company's management team. These meetings reinforced his confidence that the company was witnessing "an acceleration of operational and financial progress," he writes.

"The resurrection of GE remains solidly engaged," he added.

He notes that GE Power's overall profitability is still on the rise, which should help further support stocks and is a hallmark of the CEO. Larry Culp's leadership, which has focused on the costs of the business.

Look to the front. Heymann believes GE could potentially benefit from a fair value of between $ 14 and $ 16 per share over the next year, largely due to changes at GE Power. The network business, formerly part of GE Power, is now part of its Renewable Energy business, which has removed a management layer at GE Power and made the unit more responsible, he writes.

He also likes that Culp has forced GE Power's top management to "adopt a clear strategy on how to win in its markets and very specific operational priorities that can be tracked and measured daily, weekly and monthly," on the other hand. previous operating procedures that only required monitoring on a quarterly and annual basis.

All of this has led to a transformation, in which GE Power's "today's culture has become a culture that privileges frankness with humility and a high degree of transparency of the issues to be solved and progress made in achieving those goals" .

Write to Teresa Rivas at [email protected]