General Electric Company (NYSE:GE) announced today that it has completed the previously announced sale of its U.S. fleet services business, representing aggregate ending net investment (ENI) of approximately $4.4 billion, to Element Financial Corporation in a transaction valued at approximately $5 billion. Separately, the previously announced sale of GE’s Mexican, Australian and New Zealand fleet businesses to Element is expected to close at the end of the third quarter, and the sale of GE’s European fleet businesses to Arval, a fully-owned subsidiary of BNP Paribas, is expected to close in the fourth quarter.
“We are pleased to complete the sale of our U.S. fleet services business to Element,” said Keith Sherin, GE Capital chairman and CEO. “It is another important step as we continue to execute on our plan to sell most of the assets of GE Capital,” added Sherin.
As previously announced, GE is embarking on a strategy to focus on its high-value industrial businesses and is selling most GE Capital assets. GE and its Board of Directors have determined that current market conditions are favorable to pursue disposition of these assets. GE will retain the financing “verticals” that relate to GE’s industrial businesses.
The U.S. fleet services transaction releases approximately $0.6 billion of capital. GE Capital believes it is on track to deliver about $35 billion of dividends to GE under this plan, as previously announced (subject to regulatory approval).
Mr. Sherin concluded, “We wish our U.S. fleet services team a successful future as they join Element.” (Original Source)
Shares of General Electric opened today at $24.82 . GE has a 1-year high of $28.68 and a 1-year low of $19.37. The stock’s 50-day moving average is $25.85 and its 200-day moving average is $26.16.
On the ratings front, General Electric has been the subject of a number of recent research reports. In a report issued on August 24, Deutsche Bank analyst John G. Inch maintained a Hold rating on GE, with a price target of $29, which implies an upside of 16.8% from current levels. Separately, on July 20, UBS’s Shannon O’Callaghan reiterated a Buy rating on the stock and has a price target of $32.
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, John G. Inch and Shannon O’Callaghan have a total average return of 11.6% and 16.7% respectively. Inch has a success rate of 78.6% and is ranked #682 out of 3743 analysts, while O’Callaghan has a success rate of 79.5% and is ranked #110.
Overall, 3 research analysts have assigned a Hold rating and 4 research analysts have given a Buy rating to the stock. When considering if perhaps the stock is under or overvalued, the average price target is $33.00 which is 33.0% above where the stock opened today.