GE Gains as Citi Upgrades on Turnaround By Investing.com

By Dhirendra Tripathi

Investing.com – General Electric (NYSE:GE) shares were up 1.5% Friday as Citi (NYSE:C) upgraded the stock to buy, saying  it sees the once-iconic company is on track for a turnaround.

The brokerage has pegged $17 as the target for the stock, a Street-high and a near 30% rise from the current level of $13.16.

Citi analyst Andrew Kaplowitz based his faith on all-round improvement in execution for his optimism on the stock price, according to StreetInsider.

The analyst believes that while clean energy may not be a driver of the stock as yet, it could bring big upside if GE manages to grow its market share in wind turbines.

Kaplowitz noted that despite an almost 30% year-on-year fall in revenues of its aviation business, the segment witnessed a less than 200-basis-point reduction in operating margin. This, the analyst believes, reflects good traction with the company’s efforts at cost-cutting and one that will support profitability once demand returns.

GE is currently in the process of selling its aircraft leasing unit, GE Capital Aviation Services, to Ireland’s AerCap in a deal worth $30 billion.

The analyst believes the sale will streamline GE’s business model and further de-risk it.