General Electric shares rebound on Tuesday, industrial conglomerate to sell part of its Baker Hughes stake

November 14, 2018 8:35 am

General Electric Company (GE) announced on Tuesday that it would sell a part of its stake in Baker Hughes, as the US industrial conglomerate seeks to raise cash and repay debt.

General Electric shares closed higher for the second time in the past fifteen trading sessions in New York on Tuesday. It has also been the sharpest daily surge since June 26th. The stock went up 7.76% ($0.62) to $8.61, after touching an intraday high at $9.04, or a price level not seen since November 8th ($9.34).

Shares of General Electric Company have retreated 50.66% so far in 2018 compared with a 1.82% gain for the benchmark index, S&P 500 (SPX).

In 2017, General Electric’s stock plummeted 44.78%, thus, it again underperformed the S&P 500, which registered a 19.42% return.

Earlier this week, Larry Culp, GE’s Chief Executive Officer, said that assets would be sold with “urgency” so that high debt could be reduced, especially after the company’s shares recently hit lows unseen since March 2009 and the cost of insuring debt became the highest in six years.

As part of the agreement, another portion of General Electric’s stake will be bought back by Baker Hughes. The two companies also said that the transactions would keep General Electric’s stake in Baker Hughes at over 50%.

General Electric acquired Baker Hughes in July 2017 and, at present, it holds a 62.2% stake in the oilfield services provider.

According to CNN Money, the 18 analysts, offering 12-month forecasts regarding General Electric’s stock price, have a median target of $13.00, with a high estimate of $21.00 and a low estimate of $10.00. The median estimate represents a 50.99% upside compared to the closing price of $8.61 on November 13th.

The same media also reported that 11 out of 22 surveyed investment analysts had rated General Electric’s stock as “Hold”, while 8 – as “Buy”. On the other hand, 2 analysts had recommended selling the stock.

Weekly Pivot Levels

By using the traditional method of calculation, the weekly levels of importance for General Electric Company (GE) are presented as follows:

Central Pivot Point – $8.76
R1 – $9.36
R2 – $10.15
R3 – $10.75
R4 – $11.36

S1 – $7.97
S2 – $7.37
S3 – $6.58
S4 – $5.80

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