General Electric is nearing a deal to combine its aircraft leasing business, GE Capital Aviation Services (GECAS), with Ireland’s AerCap Holdings NV, according to Bloomberg citing people familiar with the matter.
Notably, General Electric’s (GE) GECAS business is one of the world’s largest aircraft leasing companies.
Per the Bloomberg report, a deal between the two companies is anticipated to be announced today. Bloomberg said that the Wall Street Journal was the first to report the discussion and estimates the transaction to be worth over $30 billion. (See General Electric stock analysis on TipRanks)
Earlier this year, the company reported mixed 4Q results. Adjusted EPS of $0.08 missed the Street’s estimates by a penny. However, revenues of $21.9 billion came in ahead of the analysts’ estimates.
On March 3, UBS analyst Markus Mittermaier raised the stock’s price target to $15 (10.3% upside potential) from $14 and reiterated a Buy rating. In a note to investors, Mittermaier stated that rising interest rates and the recently passed COVID-relief bill are making him more bullish on the stock. While an increase in interest rate would reduce its future pension payment obligations, the new COVID-relief bill would push GE’s Pension Plan further into the future.
Overall, consensus among analysts is a Moderate Buy based on 9 Buys and 6 Holds. The average analyst price target of $12.93 implies downside potential of about 4.9% to current levels. Shares have gained around 34.9% over the past year.