Categories Industrials, Markets

GE shares spike on reports of healthcare unit spin-off

General Electric (GE) shares jumped 8% during intra-day trading on Wednesday after the company reportedly filed for the IPO of its healthcare unit. Citing people familiar with the matter, Bloomberg reported that the public listing of GE Healthcare may be expected in the spring of 2019.

A spin-off would make GE Healthcare a dominant player in the industry, with an estimated enterprise value of $65 billion to $70 billion. The company is primarily into the business of supplying medical equipment such as diagnostic machines and MRI scanners.

The healthcare unit is the beleaguered parent’s one of the most profitable segments, accounting for over 43% of its total operating profits last year. It also contributed almost 16% of General Electric’s total sales during this period.

In 2017, the segment reported sales of $19 billion and earnings of $3.5 billion.

The company had earlier this year announced plans to spin-off the healthcare unit, headed by CEO Kieran Murphy. JPMorgan, Bank of America, Goldman Sachs, Citigroup, and Morgan Stanley are reportedly working on the public listing.

What to expect from General Electric going into 2019

Investors believe the spin-off would help the company focus better on its core manufacturing operations.

General Electric shares have been battered by investors over the last two years. Since the beginning of this year alone, the stock has lost over 70% of its value. However, the stock has a 12-month price target of $11.64, suggesting a 70% upside from the current trading price, as some analysts expect the decluttering of the firm to bear results in the long term.


We’re on Apple News! Follow us to receive the latest stock market, earnings, and financial news at your fingertips

Most Popular

Does Unity Software (U) stock has more room to run?

Last month, the IPO market was in a full swing. IPOs of Snowflake (NYSE: SNOW) and JFROG (NASDAQ: FROG) had an impressive opening day in September, the former creating a

PepsiCo (PEP): Steady snacking habits amid pandemic drive strong quarter for beverage giant

PepsiCo Inc. (NASDAQ: PEP) beat market expectations on both revenue and earnings for the third quarter of 2020. The company saw the momentum continue in its snacks business while the

Does the virus-driven boom make Electronic Arts (EA) a good investment?

With more and more people turning to virtual entertainment sources, amid the virus-related movement restrictions, video game publishers like Electronic Arts (NASDAQ: EA) are witnessing unusually high demand. Not surprisingly,

Leave a Reply

Your email address will not be published. Required fields are marked *

Add Comment

Viewing Highlight