General Electric Company GE move to divest more GE Capital Assets with the sale of supply chain finance unit Trade Payable Services is a solid step, according to Bank of America Merrill Lynch.
GE announced Wednesday it was selling the TPS unit to MUFG Union Bank for an undisclosed amount.
The Analyst
Analyst Andrew Obin reiterated a Neutral rating on GE and lowered the price objective from $12 to $11.
The Thesis
The sale of TPS — along with other divestments made late last year — is a good step in reducing its industrial finance and working capital solutions assets, Obin said in a note.
“We think the announcement should alleviate some investor concerns regarding the quality of GE Capital book up for sale and ability to drive down leverage with the divestitures, as outlined to credit rating agencies,” the analyst said.
GE announced last year it is paring itself down and plans to focus on aviation, power and renewable energy. In recent years, the company has sold off GE Capital’s Transportation Finance operations and health care assets.
MUFG Union Bank is a subsidiary of a holding company for Mitsubishi UFJ Financial Group, Inc. MUFG.
Price Action
GE shares were trading up by 0.89 percent to $9.05 at the time of publication Thursday.
Related Links:
Gordon Haskett: Why General Electric Shares Have Downside To $5
General Electric Capital Announces Another Asset Sale
Photo via Wikimedia.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
date | ticker | name | Price Target | Upside/Downside | Recommendation | Firm |
|---|
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
