On Thursday, TD Cowen updated its financial outlook on General Electric (NYSE:GE), raising the share price target to $175 from the previous $155. The firm maintained a Market Perform rating on the stock.
The revision follows General Electric's Investor Relations Day, where the company's Aerospace division presented its guidance for calendar year 2024, projecting earnings before interest and taxes (EBIT) to be between $6 billion and $6.5 billion, with free cash flow (FCF) exceeding $5 billion.
Looking ahead, General Electric's Aerospace division has set ambitious targets for calendar year 2028, aiming for $10 billion in EBIT and a 100% free cash flow conversion rate. These projections are part of the company's long-term financial goals, indicating a positive outlook for its operations and financial health.
In addition to the updated financial targets, General Electric announced a new $15 billion stock buyback authorization. This strategic move is aimed at returning value to shareholders and indicates the company's confidence in its financial stability and future growth prospects.
The raised price target to $175 by TD Cowen reflects a valuation that includes a 3.5% free cash flow yield for the Aerospace division in calendar year 2025, combined with an additional $20 per share for Vernova, General Electric's portfolio of energy businesses that focus on renewable energy and power generation.
General Electric's recent announcements and TD Cowen's updated price target suggest that the company is poised for continued financial performance and shareholder value creation in the coming years. The Aerospace division, in particular, appears to be a significant contributor to the company's positive outlook.
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