ALO Alstom

By Ted Mann 

General Electric Co. stock did something it hasn't in seven years: closed above $30 a share.

The breakthrough was hard fought. Over the last year, GE Chief Executive Jeff Immelt has said the company will part ways with the bulk of its finance business. It completed its biggest acquisition of all time with the purchase of the energy assets of France's Alstom SA, and has welcomed an activist investor into its ranks.

On Tuesday, shares of GE shares closed 1.3% higher at $30.13, the first time they closed above $30 since June 10, 2008.

In the years since then, GE's stock plunged to below $6 a share during the financial crisis, and struggled to recover despite Mr. Immelt's efforts to reassure investors that GE was changing.

This year, though, GE's shares have been in recovery mode gaining 19% since the end of December, more than the broader S&P 500 index's 1% increase.

The stock shot up in April after Mr. Immelt announced plans for an aggressive exit of GE Capital, the $500 million lending business that once produced more than half the company's earnings but raised concerns among investors. It bounced up again recently after a $2.5 billion investment by activist investor Nelson Peltz' Trian Fund Management, and strong third quarter results.

"A lot of people viewed GE as kind of getting out of the black box" when it decided to sell off most of GE Capital, said Nicholas Heymann, an analyst at William Blair & Co. who has long covered the company.

Mr. Heymann has turned increasingly bullish on Mr. Immelt's vision for the future of GE's heavy industrial businesses, which include power turbines, locomotives and jet engines, and a growing focus on reaping profits from interpreting data streams from industrial equipment.

"It's one of those things where it's all coming together," said Mr. Heymann, who has a $32 price target for GE, and believes the stock can rise to $37 a share late next year, with room to grow.

That would leave GE shares close to yet another milestone for Mr. Immelt, if not the company: $39.66. That was the price for a share of General Electric on Sept. 7, 2001, the day Mr. Immelt became CEO, just in time for a long and occasionally rocky ride.

Write to Ted Mann at ted.mann@wsj.com

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(END) Dow Jones Newswires

November 10, 2015 18:46 ET (23:46 GMT)

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