GEG says GE Stock shares will continue to rise

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General Electric

shares (GE) is up Thursday as investors continue to digest its results since the beginning of the week. Barclays remains optimistic and does not have to adjust his estimates as a result of the results – a victory in itself.

The story back. GE shares have risen 40% since the beginning of the year, although they have lost nearly 25% in the last 12 months. The most recent edition of the saga of the industrial society focuses on the results of its first quarter released Tuesday, exceeding the expectations of analysts, although it is perhaps more remarkable for other reasons. The opinion of analysts remains very divided on GE, a fact that the report has not changed much, most of Wall Street has only reiterated its previous positions as a result of the information.

What's up. Thursday, Barclays Analyst Julian Mitchell reiterated an overweight and a price target of $ 13 on stocks, stating that he was leaving his model virtually unchanged following Tuesday's results. Nonaction was a welcome change "after a series of seemingly perpetual reductions, whenever GE signals." Mitchell's target price is about 27% higher than the current price.

He writes that equities may remain volatile, but the company's outlook for free cash flow appears untouched, with the move likely to turn positive in the last quarter to $ 1.6 billion. "It was heartening to hear reiterate the aspiration to a two-digit FCF margin."

Although the company's renewable energy sector may have disappointed, Mitchell writes that there is at least a "high visibility" on the likely acceleration of his business turnover for the rest of the year. year, and that margin in the first quarter and reasonable trends in sales. If Power is profitable in 2019, investors can begin to build on the notion that they will not see any significant FCF outflows forever. In addition, he was relieved not to have "dropped new shoes" at GE Capital.

Look to the front. By applying peer-driven multiples to GE's individual units, Mitchell obtains a fair value estimate of $ 14, a dollar above his price target, and about 36% above the trading level. current actions.

As Barron As noted earlier this week, it may be too early to call GE's recovery a success, but with the big rebound of the title in 2019, bulls are also gaining momentum.

GE is up 1.4% to $ 10.24 recently.

Write to Teresa Rivas at [email protected]