The company's share price
U.S. shares of General Electric Co (NYSE:GE). have fallen 14.6 percent in the past three days after coming close to a 3-year high on March 8.
The company made a number of announcements this week that impacted investor sentiment, MarketWatch writes.
In particular, it announced the sale of its GE Capital Aviation Services (Gecas) aircraft leasing unit for $30 billion to Ireland's AerCap Holdings NV. Gecas is the largest remaining part of GE Capital, the company's financial arm that once competed with major US banks but nearly brought GE to ruin during the 2008 financial crisis.
The deal is expected to close in nine to 12 months. After that, GE Capital will effectively be liquidated whatever remains in the unit after the sale of Gecas will be integrated into GE Industrial.
The company has also announced a 1-to-8 consolidation (reverse split) of shares, which will increase the value of GE's securities eight-fold while reducing the number of shares outstanding to "more typical for companies with comparable market capitalisation", the company said in a statement.
The consolidation will take place before the annual shareholder meeting scheduled for May 4.
In addition, GE has updated its financial outlook. The company now expects its adjusted earnings to be 15-25 cents per share in 2021 and revenues to increase by a few percent. Free cash flow is expected to be in the range of $2.5-4.5bn
Analysts polled by FactSet on average estimate earnings of 25 cents per share, free cash flow of $3.6 billion, and expect a 1% increase in revenue.
Experts at Deutsche Bank (DE:DBKGn) forecast a $14 price target for GE securities. They, like analysts at Oppenheimer and J.P. Morgan, have assigned a "hold" recommendation for the company's shares. UBS advises to buy GE securities, setting the target price at $15.
GE shares fell 7.4% (to $12.27) in yesterday's trading after falling 5.4% a day earlier. Over the past 12 months, the company's capitalisation has risen almost 47% to $116.2bn, while the S&P 500 Index has gained 44% over the period.