General Electric's former medical equipment business surged in its trading debut as investors got their first chance to bet on the now-independent company.
The company's shares rose 7.1% to $59.96. There was a decline of 4.5% in the first moments of trading on the NASDAQ. The company gained 2.5%.
The beginning of trading was part of a plan to break up the industrial icon. The separation of GE's Power and Renewable Energy divisions will take place in a year's time.
"We are on track and confident in our plans to unleash the potential of GEAerospace and GE Vernova as separate companies in early 2024." GE intends to keep about 19.9% of the shares.
The health-care company's sales and profit growth have been squeezed over the past two years by the Pandemic, inflation and supply-chain turmoil. Hospitals and other providers use the company's medical equipment.
Medium-term financial targets of organic sales growth in the mid-single digit percentage range and an adjusted earnings before interest and taxes margin of up to 20% have been set by GE healthcare.
Analysts at Morgan Stanley think that the price for GE HealthCare shares would be around $60.
As an independent entity, we think GE HealthCare has the potential tounlock value as it hopes to accelerate growth with increased investment and prioritize margin expansion across the enterprise.
(Updates shares from second paragraph)
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