General Electric (NYSE: GE) share price hit the highest level of this year after trading in a narrow range over the past two quarters. The shares are trading around $11.55 for the first time this year. The upside momentum is supported by traders improving sentiments regarding GE cash position, order backlog along with the reduction in debt.
General Electric share price has further upside potential in the coming days. Indeed, some market players are expecting GE stock price to double in 2020. This is only due to the positive impacts of business strategy that is designed by its CEO Larry Culb.
The strategy is based on increasing focus on industrial and power businesses while selling non-core businesses to improve the balance sheet.
Positive Analysts Remarks are Adding to General Electric Share Price
Market analysts started praising GE’s business strategies. For instance, Coe believes that the guidance for this year’s cash-flow is achievable.
In addition, the analyst expects steady improvement in free cash flows in the following years. Moreover, the analyst claims GE’s business portfolio is strong enough to face economic downturns.
The company anticipates industrial free cash flow for this year in the range of zero and $2B. This is significantly higher from previous guidance of negative $1B to positive $1B.
The company sold billions of assets in the past couple of quarters to improve the liquidity position. Analysts say GE’s debt position would drop to 4.4x EBITDA by the end of next year – which is not a scary level.
Future Fundamentals are Improving
The company has been witnessing improvement in its key businesses such as industrial and power. Consequently, its third-quarter adjusted earnings per share of $0.15 increased 36% year over year. Furthermore, its quarterly loss from the power segment reduced by 79% year over year.
The management believes that business strategies are helping in transforming the struggling company. The CEO says, “2019 represents a progress year. It’s ‘still early’ in a multi-year transformation and 2020 and 2021 will be ‘meaningfully better.'” Overall, several factors are supporting General Electric share price upside momentum.
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