- General Electric (GE +0.9%) edges higher as UBS reiterates its Buy rating while lifting its stock price target to $17 from $15, which would imply a ~25% gain from current levels and a price the shares have not enjoyed seen since January 2018.
- GE's March 10 Analyst Day was an important step toward the transformation to a "more focused, simpler, stronger" GE with "significantly fewer legacy overhangs and improved strategic optionality medium and long term," UBS analyst Markus Mittermaier writes.
- GE shares soared 21% in the month leading up to its Analyst Day on March 10, but investors then sold the stock down 12.4% in two days because of their "negative interpretation" of the GECAS deal's impact on near-term free cash flow, but Mittermaier believes the event was a "clear positive strategically."
- Despite the raised price target, Mittermaier lowers his EPS estimates for Q1 to $0.02 from $0.03, FY 2021 to $0.26 from $0.29 and 2022 to $0.65 from $0.76 - all still above analyst consensus of $0.01, $0.23 and $0.51, respectively.
- Bank of America recently retained its Buy rating, saying a simpler structure and consistent 'beat and raise' story should narrow GE's valuation discount.