General Electric Co (GE) said earlier this week that it forecast full-year free cash flow of between $2.5 billion to $4.5 billion and full-year adjusted earnings within the range of $0.15 to $0.25 per share. GE actually reiterated the guidance it had provided in January.
The company expects to generate higher cash flow in 2021 from all industrial businesses with the exception of non-gas power.
In addition, General Electric announced an agreement with Ireland’s AerCap Holdings NV over the sale of its aircraft-leasing business, as the industrial conglomerate has been seeking to reduce its debt.
General Electric shares closed lower for a third consecutive trading session in New York on Thursday. It has also been the steepest single-session loss since September 21st 2020. The stock went down 7.40% ($0.98) to $12.27, after touching an intraday low at $11.96, or a price level not seen since February 19th ($11.68).
Shares of General Electric Company have risen 13.61% so far in 2021 compared with a 4.88% gain for the benchmark index, S&P 500 (SPX).
In 2020, General Electric’s stock went down 3.23%, thus, it underperformed the S&P 500, which registered a 16.26% gain.
“We are on a positive trajectory in 2021 as momentum builds across our businesses and we transform to a more focused, simpler, and stronger industrial company,” GE’s Chief Executive Officer Larry Culp said in a statement.
Meanwhile, the agreement for GE’s aircraft-leasing business, known as GE Capital Aviation Services, is to allow the company to pare its debt by $30 billion.
Additionally, the industrial conglomerate announced a reverse stock split at a 1-for-8 ratio.
Analyst stock price forecast and recommendation
According to CNN Money, the 14 analysts, offering 12-month forecasts regarding General Electric’s stock price, have a median target of $14.00, with a high estimate of $21.00 and a low estimate of $5.00. The median estimate represents a 14.10% upside compared to the closing price of $12.27 on March 11th.
The same media also reported that at least 11 out of 19 surveyed investment analysts had rated General Electric’s stock as “Buy”, while 8 – as “Hold”.