Thursday, 18 April 2024

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General Electric shares PT cut by RBC on adjusted EBITDA estimate By

AerCap Holdings prices 23 million share upsized secondary offering at $58.50

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On Thursday, RBC Capital adjusted its outlook on General Electric (NYSE:), reducing the price target to $160 from $180 while keeping an Outperform rating on the stock. This revision follows the completion of the spinoff of GE Vernova (GEV), leading to an update in the firm’s estimates for the now standalone GE Aerospace sector.

RBC Capital’s reassessment of General Electric’s stock is based on a 20x multiple applied to the anticipated 2025 adjusted EBITDA of $8.8 billion. The firm expresses confidence in the company’s prospects, citing a favorable mix and a focus on industry fundamentals and capital allocation as reasons for maintaining a bullish sentiment.

The newly established GE Aerospace is viewed as a high-quality large-cap A&D (Aerospace & Defense) stock. RBC Capital’s commentary indicates that the market’s outlook is expected to stay positive as General Electric benefits from its strategic positioning and operational focus following the spinoff of GE Vernova.

The adjustment of the price target to $160 reflects the firm’s current valuation of General Electric’s business performance and future potential. The Outperform rating suggests that RBC Capital anticipates that GE’s stock will perform better than the average return of the stocks that the firm covers.

Investors and market watchers will be monitoring General Electric’s progress as it navigates its post-spinoff landscape, with RBC Capital’s updated price target providing a benchmark for expectations regarding the company’s financial trajectory through 2025.

InvestingPro Insights

In light of RBC Capital’s revised outlook on General Electric, investors may find additional context in the real-time data provided by InvestingPro. GE’s market capitalization stands at a robust $159.2 billion, reflecting its substantial presence in the market. The company’s Price/Earnings (P/E) ratio is currently at 17.36, offering a glimpse into the market’s valuation of its earnings. Furthermore, the Price/Book (P/B) ratio as of the last twelve months ending Q4 2023 is 5.81, which may suggest a premium valuation given the company’s assets and shareholder equity.

InvestingPro Tips highlight that GE is a prominent player in the Industrial Conglomerates industry and has maintained dividend payments for 53 consecutive years, showcasing its longstanding commitment to shareholder returns. Analysts have revised their earnings upwards for the upcoming period, indicating potential optimism about the company’s financial…

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