General Electric Company shares have fallen more than 7% over the past two days amid plans to break up the firm and reports that it had more than $11 billion in charges stemming from its insurance portfolio and new tax laws. The market’s confidence in the company has been shaken to the core, and analysts are concerned that the current share price may be greater than the sum of parts in a breakup scenario.
JPMorgan indicated that its $16 price target is increasingly difficult to justify, while Cowen & Co. believes that the stock’s breakup value would be just $11 to $15 per share. Other investors and analysts are more confident in the value of a breakup, including Nelson Peltz’s Trian Fund Management, which is widely seen as pushing for a breakup. Analysts at Ned Davis Research also believe that the separate businesses would perform well due to their sector leadership. (See also: Why GE’s Stock Rebound Will Fizzle: Miller Tabak.)
General Electric shares have declined sharply over the past few days as the market questions the potential breakup value. …read more
Read more here: Will GE Stock Break Down From Its 52-Week Lows?