GE) and its investors. Fortunately, one Wall Street analyst says that while GE is taking a big earnings hit, it has several significant offsets supporting its cash flow.
Obin is now forecasting a full-year 2020 Industrial free cash flow loss of $1.6 billion, but he expects Industrial FCF to bounce back to +$1.5 billion in 2021.
Bank of America is projecting Industrial EBITDA will drop from $12.3 billion in 2019 to just $4.5 billion this year. However, Obin said lower cash taxes will save $2.2 billion, lower capex will save $600 million, and lower interest expense will save another $600 million this year, offsetting the $7.8 billion year-over-year decline in Industrial EBITDA.
BA) 737 MAX will have on GE.
“This was a $1.4bn outflow in 2019, but we estimate a $0.5bn benefit in 2020E, or a +$1.9bn y/y positive swing,” Obin wrote in a note.
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Latest Ratings for GE
| Date | Firm | Action | From | To |
|---|---|---|---|---|
| Jul 2020 | Deutsche Bank | Maintains | Hold | |
| May 2020 | UBS | Maintains | Buy | |
| Apr 2020 | Credit Suisse | Maintains | Neutral |
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