General Electric Company (NYSE:GE) announced that it has signed a contract worth approximately $250 million with the Egyptian Electricity Transmission Company (EETC) to provide the company’s advanced grid solutions technologies to substations located in Mostathmereen, Beni Suef Industrial, Ismailia East and Temay Alemdeed. These four Gas-Insulated Substations (GIS) will help connect 7 gigawatts (GW) of power to the national grid, which is the equivalent to the electricity needs of more than 6.5 million Egyptian homes. This will be crucial to reinforce Egypt’s network during periods of peak demand.
This contract is part of the Protocol of Cooperation signed during the French Presidential visit to Egypt, highlighting the importance of this project to Egypt’s energy sector. His Excellency President Abdel Fattah El Sisi and His Excellency President François Hollande, witnessed the signing, among other agreements between the two countries to further support Egypt’s economic, industrial and infrastructural development.
French components make up approximately 50% of the total project scope including the GIS technologies to be installed at the substations which are manufactured and assembled in France. The project is being executed in a consortium with Rowad Modern Engineering, a leading Egyptian contractor, for the construction work of the substations. Furthermore, the project is expected to create approximately 50 permanent jobs and 1,000 indirect jobs for Egyptians during its execution. The first phase, which includes the Mostathmereen substation, will be connected to the grid within six months; and the remaining three substations will be completed by the end of 2017.
H.E. Dr. Mohamed Shaker, Egypt’s Minister of Electricity and Renewable Energy, said: “Egypt’s generation capacity has significantly increased over the last two years, additionally we’re moving towards a more diversified energy mix which drives us to find ways to boost the efficiency and stability of Egypt’s national grid. Through GE’s advanced technological solutions, we will be able to better manage and transmit power nationwide.”
As part of the contract, GE will also supply a digital data protection system, network management system and telecommunication technologies, which will help connect the substations to the National Energy Control Center and improve the network’s stability. The installation of GE’s GIS will offer several solutions for Egypt’s grid including smarter networks, condition-based maintenance and greater load control to prevent outages.
Ayman Khattab, President & CEO for GE North East Africa said: “We are proud to continue our 30-year partnership with EETC by providing our latest grid technologies to help meet Egypt’s continuing and growing energy needs in a more efficient way. We are keen to support the government’s initiatives in the energy sector in both generation and transmission, in order to offer a more stable supply of electricity to Egyptian homes.” (Original Source)
Shares of General Electric are currently trading at $30.96, down $0.07 or -0.23%. GE has a 1-year high of $32.05 and a 1-year low of $19.37. The stock’s 50-day moving average is $30.74 and its 200-day moving average is $29.41.
On the ratings front, GE has been the subject of a number of recent research reports. In a report issued on April 15, Deutsche Bank analyst John G. Inch maintained a Hold rating on GE, with a price target of $28, which reflects a potential downside of -9.8% from last closing price. Separately, on April 11, Morgan Stanley’s Nigel Coe reiterated a Hold rating on the stock and has a price target of $31.
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 Nigel Coe have a total average return of 13.1% and 1.8% respectively. Inch has a success rate of 75.8% and is ranked #404 out of 3795 analysts, while Coe has a success rate of 54.2% and is ranked #1380.
Overall, 4 research analysts have assigned a Hold rating and 6 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 $31.80 which is 2.5% above where the stock closed last Friday.