Company News

BUZZ-GE: "The floor has now been put in" - RBC says buy

** General Electric shares up 2.6 pct at $12.40 premarket as RBC upgrades to “outperform” from “sector perform” and raises PT to $15 on launch of Larry Culp era

** “Investor confidence in Larry Culp’s strategic vision and operating excellence should put a floor in the stock,” analyst Deane Dray writes in note

** GE’s stock jumped as much as 16 pct on Mon and ultimately finished session up 7 pct after co replaced CEO John Flannery with outsider and board member Culp

** Dray cautions, however, there are no quick fixes and it will take time for Culp to assemble his own team and put his imprint on co’s breakup plan

** Adds that biggest pushbacks to upgrade are self-inflicted challenges in Power, including recent turbine blade failures, and cites tail risks at GE Capital, SEC investigations, weak cash flow, and a “likely” dividend cut

** Action by Dray comes after he cut his PT from $15 to $13 on Fri saying GE shares were searching for the bottom as “investors remain highly skeptical of the company’s ability to meet its full-year commitments”

** Now, 5 of 17 analysts rate GE “buy” or stronger, 10 “hold” and 2 recommend selling; median PT $14.25 (TR data)

** YTD, GE shares are now down 31 pct vs 4.3 pct gain for the S&P 500 industrials and 9.4 pct advance for S&P 500