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Why General Electric Stock Slipped Today

What happened

In advance of the spinoff of one of its business units, General Electric (GE -2.61%) saw its share price erode slightly on Friday. The company’s stock fell by nearly 3% — compared to the 0.7% decline of the S&P 500 index — on the back of several analyst price-target adjustments.

So what

During the day, three prognosticators adjusted their targets on General Electric. One was Wolfe Research’s Nigel Coe, who now feels the company is worth $107 per share rather than his former estimation of $110. Coe’s rosy view of General Electric’s future hasn’t changed, however, as he maintained his outperform (that is, buy) recommendation on the shares.

That analyst’s change was in contrast to those made by two of his peers, Citigroup‘s Andrew Kaplowitz and Deane Dray at RBC Capital. Of the two, Kaplowitz was the more aggressive raiser, upping his level to $100 per share from the preceding $87. Dray’s lift was to $98 per share from $93. Both men reiterated their equivalents of buy recommendations on General Electric stock.

All three adjustments came a day after the storied industrial conglomerate provided an update of its spinoff of GE Healthcare. The unit’s CEO Peter Arduini said that as a stand-alone company, GE HealthCare would spur “value creation as a more agile, profitable, and faster-growing business.”

Now what

It seems investors aren’t entirely sold on the benefit of spinning off the healthcare division from the main body of General Electric. The soon-to-be-independent unit — which, if all goes according to plan, will be a separate company early next month — will then have much to prove to investors. So will its former parent.

Citigroup is an advertising partner of The Ascent, a Motley Fool company. Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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