General Electric (NYSE:GE) continues to lower its stake in AerCap Holdings (NYSE:AER), the aviation leasing company. In a recent move, GE, through its wholly owned subsidiary GE Capital US Holdings, is selling 40.68 million shares of AerCap Holdings for $59 a share via an underwritten public offering. The sale will bring in about $2.4 billion for the company.
GE gained a 46% stake in AirCap Holdings in 2021 after the aviation leasing company agreed to acquire GE’s GECAS (GE Capital Aviation Services) business. As part of the $30 billion deal, GE received about $24 billion in cash, a 46% ownership stake in AerCap Holdings, and $1 billion in notes or debt instruments.
After gaining a stake in AerCap, GE gradually started cutting its holdings in the company by selling its stock. Earlier in March 2023, GE sold 18 million shares of AerCap. GE is transforming its operations by focusing only on its core industrial business and selling non-core assets. Further, the company is using the sale proceeds to lower its debt, simplify its balance sheet, and reduce financing costs.
Commenting on the secondary offering, Goldman Sachs analyst Catherine O’Brien said that GE has nearly a 34% stake in AER as of date. If the recently announced offering is completed, GE’s ownership would come down to 20%. While GE is reducing its stake in AerCap, let’s look at what analysts recommend for its stock.
Is GE a Good Stock to Buy?
GE stock is up about 75% year-to-date as investors cheered the company’s transformation efforts to make its business leaner. Further, analysts maintain a bullish outlook on the stock. It has received 10 Buy and three Hold recommendations for a Strong Buy consensus rating.
Analysts’ average price target of $130.58 implies 14.28% upside potential from current levels.
