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General Electric: A Positive Outlook, After The 'Reset' Of Course

March 18, 2019

Summary:

- General Electric released its 2019 outlook material, and management called 2019 the "reset" year.

- Management disclosed financial leverage targets for General Electric's industrial and financing businesses, and it expects the company's financial position to greatly improve by 2021.

- I am long General Electric, and I plan to stay long the stock.

 

General Electric ($GE) recently released its 2019 outlook and, as you can expect, the next year is going to be a long and challenging journey for this industrial conglomerate. Management called 2019 a "reset" year. The stock was initially down big after the outlook call, but shares recovered and finished the trading week higher by around 4%.

 

While 2019 is projected to be a reset year, I believe that the bull case gets stronger the longer that you are able (and willing) to look out. Mr. Larry Culp, CEO, has communicated in great detail the challenges that his team will face in 2019 (with the Power struggles taking center stage), but I believe that nothing has stood out more than the focus that is being placed on GE's financial position, and rightfully so. In my mind, Mr. Culp's success will be largely tied to his ability to improve GE's leverage, and this is the reason why I have covered the topic several times in the recent past (see here for the latest example).

 

This article will include updated thoughts on GE's financial position based on the outlook material, and I will describe the plan that management laid out to put this company in a better financial position by 2021.

 

Read more here

 

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