GE Healthcare’s board is expected to adjust the dividend with a policy in line with industrial peers. In addition, GE plans to substantially diminish the balance sheet of GE Capital. The company is assuming about $3 billion capital contribution to GE Capital in 2019. Following the announcement, the company’s shares rose 7.8% on June 26.
Analysts are expecting an outperformance from the stock in the near-future after the separation
Meanwhile, a few brokerage firms including JP Morgan has advised investors to sell their stake in GE due to significant overvaluation, adding that business trends are not likely to improve next year. General Electric will voluntarily lower its dividend in the future, an analyst at JP Morgan told CNBC.
Meanwhile, a majority of the sell-side analysts are expecting the company to outperform once the separation is completed. This can be known from the recommendation trends wherein seven of the 17 analysts are recommending a “strong buy” or “buy” rating, while six are maintaining a “hold” rating.
The company is scheduled to report its second-quarter earnings on July 20 before the market opens. While GE recorded a 14% growth in adjusted earnings for the first quarter, Wall Street analysts estimate a 39.30% drop in earnings in the second quarter.