GE in upper 36's
AP
Ahead of the Bell: General Electric
Friday April 27, 9:14 am ET
General Electric Rises in Premarket on Citi Note Suggesting Partial Breakup
NEW YORK (AP) -- Shares of General Electric Co. inched up in premarket trading Friday, after a Citigroup analyst said the global conglomerate could sell its entertainment, real estate and financial arms to unlock shareholder value and address a stagnant share price.
Shares advanced 38 cents to $36.22 in premarket electronic trading. from their close at $35.84 Thursday on the New York Stock Exchange.
Jeffrey T. Sprague in a client note kept a "Buy" rating and $45 target price on the stock.
"GE stock has basically gone sideways for five years despite solid underlying execution," wrote Sprague, possibly due to the company's size and complexity.
GE has a market capitalization of $368.55 billion and operates diversified financial and entertainment arms in addition to its manufacturing segments, which make lightbulbs, power turbines, airplane engines and more.
Sprague suggested the company could spin off its NBC Universal unit, which operates television and film studios, theme parks, Web sites and more. GE owns most of NBC, while French media and telecommunications company Vivendi owns a minority stake.
The analyst also suggested that GE could sell its GE Money and real estate operations.
A slimmed-down GE would still enjoy the competitive benefits of being a large global company, with an estimated $125 billion in 2007 sales, added Sprague. Last year, the company generated $163.39 billion in sales.
GE shares have traded in a 52-week range between $32.06 and $38.49.
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