General Electric Stock Closes Above $30 for First Time in Seven Years
November 10 2015 - 6:01PM
Dow Jones News
By Ted Mann
General Electric Co. stock did something it hasn't in seven
years: closed above $30 a share.
The breakthrough was hard fought. Over the last year, GE Chief
Executive Jeff Immelt has said the company will part ways with the
bulk of its finance business. It completed its biggest acquisition
of all time with the purchase of the energy assets of France's
Alstom SA, and has welcomed an activist investor into its
ranks.
On Tuesday, shares of GE shares closed 1.3% higher at $30.13,
the first time they closed above $30 since June 10, 2008.
In the years since then, GE's stock plunged to below $6 a share
during the financial crisis, and struggled to recover despite Mr.
Immelt's efforts to reassure investors that GE was changing.
This year, though, GE's shares have been in recovery mode
gaining 19% since the end of December, more than the broader
S&P 500 index's 1% increase.
The stock shot up in April after Mr. Immelt announced plans for
an aggressive exit of GE Capital, the $500 million lending business
that once produced more than half the company's earnings but raised
concerns among investors. It bounced up again recently after a $2.5
billion investment by activist investor Nelson Peltz' Trian Fund
Management, and strong third quarter results.
"A lot of people viewed GE as kind of getting out of the black
box" when it decided to sell off most of GE Capital, said Nicholas
Heymann, an analyst at William Blair & Co. who has long covered
the company.
Mr. Heymann has turned increasingly bullish on Mr. Immelt's
vision for the future of GE's heavy industrial businesses, which
include power turbines, locomotives and jet engines, and a growing
focus on reaping profits from interpreting data streams from
industrial equipment.
"It's one of those things where it's all coming together," said
Mr. Heymann, who has a $32 price target for GE, and believes the
stock can rise to $37 a share late next year, with room to
grow.
That would leave GE shares close to yet another milestone for
Mr. Immelt, if not the company: $39.66. That was the price for a
share of General Electric on Sept. 7, 2001, the day Mr. Immelt
became CEO, just in time for a long and occasionally rocky
ride.
Write to Ted Mann at ted.mann@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
November 10, 2015 18:46 ET (23:46 GMT)
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