S&P revises GE credit outlook to negative after Peltz buys in
Get Alerts GE Hot Sheet
Overall Analyst Rating:
BUY (= Flat)
Dividend Yield: 0.7%
Revenue Growth %: +17.5%
Join SI Premium – FREE
(Reuters) - Standard & Poor's said on Wednesday it was more likely than before to cut General Electric Co's (NYSE: GE) credit rating in the next two years after activist investor Nelson Peltz's purchase of a $2.5 billion stake in the company.
Peltz's Trian Fund Management, which unveiled its roughly 1 percent stake in GE on Monday, urged GE to explore more share buybacks including by taking on new debt.
S&P said in a report that Trian was advocating share buybacks "beyond our current expectations." Trian's move comes after GE management had already made statements that suggest it could adopt a less conservative financial policy, S&P said.
S&P revised its outlook on GE's credit rating to "negative" from "stable," meaning S&P may downgrade the credit rating in the next two years. S&P also affirmed its "AA+" corporate credit rating on GE.
"The negative outlook reflects our expectation that the company could potentially adopt a less conservative financial policy than we currently expect," S&P said in the report, adding that GE could eventually pursue buybacks "to an extent that significantly increases its leverage."
(Reporting by Lewis Krauskopf in New York)
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- GE Aerospace (GE) PT Raised to $180 at BofA Securities
- GE Aerospace (GE) Tops Q1 EPS by 16c; Bumps Outlook
- Chemicals maker Dow beats quarterly profit estimates
Create E-mail Alert Related Categories
ReutersRelated Entities
Nelson Peltz, Trian Fund, Standard & Poor'sSign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!