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GE shares pop 4% after Immelt leaves, giving activist Peltz ‘what he wanted’

By dailymail / Published on Tuesday, 13 Jun 2017 00:47 AM / No Comments


“The early departure of CEO Immelt raises concerns that 2017 estimates could fall short and certainly underscores our view that 2018 EPS likely needs to come down substantially,” Vertical Research Partners analyst Jeff Sprague said in a note Monday.

In addition, back when the Fox Business report speculating about Immelt’s departure came out, JPMorgan’s Stephen Tusa reiterated that “GE is an expensive stock.

John Flannery, current president and CEO of GE Healthcare, will take Immelt’s place as CEO on Aug. 1 and become chairman and CEO effective Jan. 1, 2018.

Flannery “may be inclined to take a hard look at the oil & gas division, which has been hurting GE profitability,” said David Pratt, MCAM-International President, said in an emailed statement to CNBC. MCAM maintains an archive of documents related to patents and other intangible assets from many countries.

Pratt also expects Flannery to use GE’s technological know-how in improving industrial products and to push for more cybersecurity in GE’s data and supervisory system that runs power plants, the electric grid, wind turbines and heavy manufacturing.

If the new CEO does also look more at GE’s energy operations, Peltz may be supportive.

Last October, when GE and oilfield services company Baker Hughes said they would form a new, GE-controlled firm, Peltz said the agreement is “a great deal.” The tie-up should allow GE to compete effectively with Baker Hughes’ rival Schlumberger and benefit from tax advantages, Peltz said.

— CNBC’s David Faber, Chris Hayes and Lauren Thomas contributed to this report.

Watch: Trader says changes will occur faster at GE