Investors Applaud GE's (GE) Asset Sale, Buyback Plans, But Shares Not Expected to Move Over Next Few Years

April 13, 2015 3:33 PM EDT

General Electric (NYSE: GE) shares are lower following last Friday's run higher on a new common stock buyback and real estate asset sale plan. Barron's agrees, saying that it was just about time to sell.

The report notes that GE is trading for 16 times expected FY15 earnings, which could be a rich multiple for a company that is refocusing more assets on its industrial business. Notably, United Technologies (NYSE: UTX) also trades for around the same multiple, while Honeywell (NYSE: HON) goes for about 17 times earnings expectations.

GE's multiple is also likely to come down as analysts rework expectations on the asset sale and capital allocation plans.

Many on Wall Street saw the asset sale as a positive, but don't expect much from the stock moving forward for at least the next year or two. GE Capital accounted for 57 percent of the company's earnings in 2007, slipping to 42 percent last year, and the company plans for the branch to amount to around 10 percent of earnings by 2018.

Shares of GE are down 3 percent Monday.



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