GE Biopharma sale unlocks $10B of further value, says William Blair

William Blair analyst Nicholas Heymann believes General Electric (GE) unlocked $10B of additional value by selling the Biopharma portion of its Life Sciences business to Danaher (DHR) for $21.4B. If GE’s remaining healthcare businesses have an enterprise value of $36B, when added to the roughly $21B the company will now receive for its Biopharma business, new CEO Larry Culp has effectively unlocked about $10 billion of additional value, Heymann tells investors in a research note. Despite the lack of 2019 detailed guidance, “there is no fundamental case” for GE’s share price to have further downside risk, adds the analyst. He says “liquidity is very ample,” GE’s original targeted proceeds from asset sales are now being materially expanded and completed earlier than expected, and unknown risks and litigation are being resolved in line with prior reserves. Heymann continues to believe GE’s underlying intrinsic value, assigning no value to GE Power, is somewhere in the range of $14-$16 per share. This range “seems to be a highly feasible base case valuation” for GE’s share price over the next 6-12 months, says the analyst, who keeps an Outperform rating on the name.
https://thefly.com/landingPageNews.php?id=2870381