General Electric Co. (NYSE: GE)
General Electric enjoyed one of its best days on Wall Street since March 2009 after JPMorgan Chase analyst Stephen Tusa who has been bearish on the company upgraded its stock.
Shares of General Electric were up more than 10.7% to $7.43 in heavy volume on Thursday morning. The stock, which was up 12% in premarket hours, has lost 61% since the beginning of the year.
Tusa said the company now has a more balanced risk reward at current levels. JPMorgan Chase raised its rating on shares of General Electric from underperform to neutral and scrapped it from a list of shares that investors ought to short. “We now believe a more negative outcome on the liabilities (equity dilution for one) is at least partially discounted, and it’s possible that the company can execute its way through an elongated workout that limits near term downside,” Tusa said in his report.
The other reason why the stock jumped on Thursday is because General Electric said it is launching an Industrial Internet-of-Things (IIoT) software firm valued at $1.2 billion. The company intends to create a company that will focus on seizing opportunities in the Industrial Internet-of-Things market that is slated to grow at a quick pace in the next few years.
General Electric said the company will be independently run by its own board of directors. According to a statement released early Thursday, the company is expected to bring together the GE Power Digital, GE Digital IoT products, and Grid Software Solutions businesses.
“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 GE Chairman and CEO H. Lawrence Culp, Jr. “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.”
On top of that, the company will sell a majority stake in field service management software private ServiceMax, to private equity firm Silver Lake in a deal that is expected to close during the first quarter of calendar 2019. General Electric will retain a stake of 10% in ServiceMax, a company it acquired two years ago for $915 million. Bill Ruh, GE Digital CEO is set to leave the company soon to seek other opportunities.
General Electric Company Profile
General Electric Co. is a technology and financial services company that develops and manufactures products for the generation, transmission, distribution, control and utilization of electricity. Its products and services include aircraft engines, power generation, water processing, security technology, medical imaging, business and consumer financing, media content and industrial products.
The company operates through eight segments: Power, Oil & Gas, Aviation, Healthcare, Transportation, Appliances & Lighting and GE Capital. The company was founded by Thomas A. Edison in 1878 and is headquartered in Boston, MA. – CNN Money