General Electric (GE +6%) pushes forward to its sixth straight gains and its best level in two months on reports that Apollo Global will bid to buy all or part of GE Capital Aviation Services, despite some analyst skepticism.
CFRA analyst Jim Corridore upgrades GE to Buy from Hold and raises his price target to $11, saying "with GE preparing to spin off healthcare and sell off its share in Baker Hughes, we think this news could provide a path to fix GE's highly leveraged balance sheet."
Meanwhile, J.P. Morgan bear Stephen Tusa believes a sale would not prove the "silver bullet" to leverage issues that bulls expect, but says the time likely is approaching where GE will provide something "more tangible, perhaps shrinking the balance sheet," that will make the company easier to value.
However, related dilution, combined with a full "cleanse" of the accounting structure, should result in a "substantially lower run rate fundamental anchor than many appreciate," Tusa says.
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