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General Electric Co GE

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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Stewardship

PREMIUM

Amended Employment Agreement Keeps Culp Longer, a Necessity for Shareholders

Joshua Aguilar Equity Analyst

Analyst Note

| Joshua Aguilar |

On Aug. 20, General Electric announced it is amending CEO Larry Culp’s employment agreement. While there are puts and takes as to how it’s structured, we are largely positive on the development. For now, we are leaving our current fair value estimate of $9.60 for the narrow-moat-rated firm unchanged, even after the news that GE Power signed power agreements over $1.2 billion in Iraq (which based on our currently outlook doesn’t really move the needle on valuation).

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Company Profile

Business Description

With historical ties to inventor Thomas Edison, General Electric was formed through the combination of two companies in 1892. Today, GE is known for its digital industrial offerings and massive installed base spread across a variety of products and services, including aircraft engines, gas turbines, wind turbines, and medical diagnostic equipment, among others. After the sale of GE Transportation to Wabtec and a majority of its stake in Baker Hughes, as well as the sale of GE Biopharma to Danaher, the company's focus turns to Aviation, legacy Healthcare, Power, and Renewable Energy. The company continues to embark on a multiyear turnaround under the lean manufacturing expertise of former Danaher CEO H. Lawrence Culp, who has slowly started to shift GE's culture in a positive direction.

Contact
5 Necco Street
Boston, MA, 02210
T +1 617 443-3000
Sector Industrials
Industry Specialty Industrial Machinery
Most Recent Earnings Jun 30, 2020
Fiscal Year End Dec 31, 2020
Stock Type Cyclical
Employees 205,000

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