Analyst Note| Joshua Aguilar |
Nothing in narrow moat rated General Electric’s results materially alters our long-term thesis. In fact, GE outperformed our expectations in power and renewables, performed mostly in line with our expectations for healthcare, but slightly lagged behind our expectations in aviation. We slightly bump up our fair value estimate to $15.90 from $15.70 in what we see as a solid quarter confirming our bullish view. As a reminder, we see multiple potential remaining catalysts including the AerCap-GECAS merger, which has received regulatory and AerCap shareholder approval; a potential monetization of healthcare; a potential ringfencing of insurance; a potential raised earnings guide as the year progresses; and of course, material progress toward a high-single-digit free cash flow yield, which could come in ever higher over the long term and quicker than the market appreciates.