General Electric got a price target hike and rating upgrade from UBS analysts, who are optimistic about the conglomerate’s ongoing turnaround under CEO Larry Culp.
UBS analyst Markus Mittermaier raised his rating on GE shares to "buy" from "hold", citing the group's balance sheet improvements that he expects would bolster cash flows in the coming year. Mittermaier thinks that analyst and investor perception on GE would shift from "significant cash drag to successful transformation" under Culp's leadership.
Mittermaier also boosted his price target on GE shares (by $1.50) to $14 a share, one of the highest targets on Wall Street.
The analyst expects industrial free cash flows to increase to around $2.3 billion next year.
GE CEO Culp has promised that 2019 would be a "year of change" for the conglomerate. Culp has targeted asset sales of around $38 billion to take care of both the company's longer-term debt profile and its underfunded pension liabilities. Earlier in the year, Culp reached a deal to sell GE's Biopharma division to Danaher Corporation for around $21 billion. Culp said it would trim its holding in oil services group Baker Hughes to less than 50% .