Tuesday, February 7, 2023
HomeMarketGE Is Breaking Up. Wall Street Is Upbeat.

GE Is Breaking Up. Wall Street Is Upbeat.

The average Wall Street target price for GE stock is up about 7% over the past few weeks.

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Wall Street likes the prospect of the slimmed-down 
General Electric
that 2023 will bring.

Analyst price targets for the industrial conglomerate are on the way up after dropping for most of 2022. Friday,
Barclays
analyst Julian Mitchell raised his price target to $96 a share from $92. He rates shares Buy.

GE (ticker: GE) will spin off GE HealthCare to shareholders on Jan. 3. Mitchell increased his valuation up for that business, which drove the price-target boost.

He isn’t the only one rejiggering GE numbers ahead of the spinoff. The average analyst price target for GE stock is up to about $93, according to FactSet, after bottoming out at about $87 in October.

It’s a roughly 7% boost, but 2022 has been tough in terms of expectations for the stock price. The average analyst price target started the year at about $121 a share. Inflation, rising interest rates, and word from GE management that investors should expect its annual results to come in at the low end of the range it had forecast have made Wall Street less enthusiastic.

The war in Ukraine and a period of uncertainty about U.S. policy on renewable-power generation didn’t help.

The latter issue was settled when the government passed the Inflation Reduction Act in August. That law includes tax credits that extend for years into the future for renewable power generation and project construction. That’s a positive for GE’s wind power business.

There isn’t any real magic in analysts’ price targets. They are, essentially, a reflection of either what the Street believes a stock will do over the next 12 months or a good price to pay for a stock to earn a reasonable return. They can be helpful guides, but targets tend to go up and down with the stock price, mirroring a lot of what investors already know.

Still, a rising target price is a sign that Wall Street is feeling better about a stock, so the change in the average call on GE is a bit of good news for investors headed into the new year.

GE stock was down 1.3% at $77.77 in Friday trading. The
S&P 500
and
Dow Jones Industrial Average
had lost 1.4% and 1.2%, respectively.

Barron’s wrote positively about GE stock in August. Shares are up about 5% since then. The S&P 500 is off about 7% over the same span. GE stock is down about 18% so far this year.

Write to Al Root at allen.root@dowjones.com

Credit: marketwatch.com

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