General Electric shares surged Thursday after the conglomerate posted better-than-expected revenue, as strong aviation results in the fourth quarter overshadowed lingering problems in the GE Capital and power businesses.
The value of GE following those spinoffs has been a key point of debate among Wall Street analysts.
The shares rally came as a surprise to some analysts on Wall Street, who had been warning that GE stock may be overvalued for this earnings report.
J.P. Morgan’s Stephen Tusa warned investors earlier this week that the stock may turn lower after the results. Tusa, who is widely followed for his calls on GE, has said that a level around $6 a share was the bottom. GE closed Wednesday trading at $9.10 a share.
Inch told clients that GE may also change the way it reports its accounting. Shifting the company’s earnings presentation to generally accepted accounting principles “would be a welcome relief,” Inch said, although it could “shock” the market. GE’s earnings presentations have not historically included restructuring charges, which are often more than $1 billion per quarter.