General Electric said earlier this week that it had finalized the sale of its BioPharma business to Danaher Corporation for an estimated $20 billion, after accounting for taxes, fees and factored receivable balances.
General Electric shares closed lower for the fourth time in the past ten trading sessions in New York on Wednesday. It has also been the steepest single-session loss since March 16th. The stock went down 11.34% ($0.90) to $7.04, after touching an intraday low at $7.02, or a price level not seen since March 25th ($6.97).
Shares of General Electric Company have retreated 36.92% so far in 2020 compared with a 23.53% loss for the benchmark index, S&P 500 (SPX).
In 2019, General Electric’s stock went up 47.42%, thus, it outperformed the S&P 500, which registered a 28.88% gain.
Under the terms of the deal, the industrial conglomerate received a total consideration of $21.4 billion, including a cash consideration of $21 billion as well as Danaher’s assumption of certain pension liabilities.
“Completing the sale of BioPharma represents a critical milestone on our multi-year transformation, fortifying our considerable sources to de-risk our balance sheet and continue to solidify our financial position,” H. Lawrence Culp, Jr., General Electric’s Chairman and Chief Executive Officer, said in a press release.
“I am proud of the teams for completing this transaction amidst a great deal of global change. As we go forward, GE retains one of the world’s leading healthcare companies, using our global scale and technical leadership to deliver better outcomes and more capacity to a world striving for Precision Health,” Culp added.
Analyst stock price forecast and recommendation
According to CNN Money, the 15 analysts, offering 12-month forecasts regarding General Electric’s stock price, have a median target of $11.00, with a high estimate of $15.00 and a low estimate of $6.00. The median estimate represents a 56.25% upside compared to the closing price of $7.04 on April 1st.
The same media also reported that at least 13 out of 21 surveyed investment analysts had rated General Electric’s stock as “Buy”, while 8 – as “Hold”.