Shares of General Electric Co. (GE) surged 3.4% in morning trading Friday, after Goldman Sachs analyst Joe Ritchie's bullish call on the industrial conglomerate, saying he believes GE's fundamentals have bottomed out. Ritchie resumed coverage of GE with a buy rating and stock price target of $10, which is 47% above current levels. GE was 'not rated' at Goldman since February 2019, as the bank was acting in an advisory capacity, and was rated neutral before that. "Admittedly, we might be a little early on the turn in the stock, but we believe we are at a bottom from both a fundamental and sentiment perspective, and that is typically the best time to own industrial cyclicals," Ritchie wrote in a note to clients. "Our base case assumption is that a vaccine will be mass distributed over the next 12 months and, under this scenario, we believe the second derivative improvement on the resumption of air travel will be significant and many of the underlying concerns on GE's balance sheet will fall to the background." The stock has now run up 11.5% over the past three days, after the stock dropped earlier after the company disclosed it received a "Wells notice" from the SEC ( ). The stock has still lost 38.4% year to date, while the SPDR Industrial Select Sector ETF (XLI) has slipped 0.6% and the S&P 500 has gained 7.3%.
-Tomi Kilgore; 415-439-6400; AskNewswires@dowjones.com
(END) Dow Jones Newswires
October 09, 2020 09:44 ET (13:44 GMT)
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