Analyst: General Electric Company (GE) Undervalued In Breakup Scenario

NYSE: GE | General Electric Company  News, Ratings, and Charts

GE – Melius Research says GE is worth 25% more than its current valuation.

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General Electric Company (NYSE:GE) has fallen on hard times.

The industrial behemoth, collapsing under the weight of shortsighted acquisitions and massive pension obligations, has seen its shares plunge more than 24% in 2018 alone, and 56% over the past 12 months.

However, as CNBC reports, at least once prominent Wall Street analyst at Melius Research believes General Electric Company (GE - Get Rating) is being undervalued at this point:

Past looks at the value of GE’s individual businesses — also known as a “sum-of-the-parts” analysis — cast doubt on whether a fire sale of GE’s assets would even fetch today’s price at $13.28 per share. But Melius found that spinoffs from U.S. industrial companies return twice the value of the broader stock market, revealing a more optimistic forecast for GE.

“GE’s [sum-of-the-parts] as an example … likely undervalues the assets by 25 percent or more,” Melius wrote.

General Electric Company (GE - Get Rating) has been spinning off units at a rapid rate to raise cash. It also slashed its dividend and buyback programs to boost liquidity. More unit sales — and layoffs — are likely coming soon, and the question remains whether the once-mighty company can ever generate solid returns for shareholders ever again.

General Electric Company shares closed at $13.07 on Friday, down $0.28 (-2.10%). Year-to-date, General Electric Company (GE - Get Rating) has declined -24.48%, versus a -2.91% rise in the benchmark S&P 500 index during the same period.

General Electric Company (GE - Get Rating) currently has a POWR Rating of D (Sell), and is ranked #32 of 34 stocks in the Industrial – Manufacturing category.

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