ROP - GE sum-of-the-parts analysis implies 20% upside RBC analyst says

GE's (GE +3.0%) breakup makes strategic sense, says RBC analyst Deane Dray, whose sum-of-the-parts model points to an implied valuation of ~$130/share, or 20% upside to GE shares. Al Root at Barron's comes up with a similar SOTP value. That's "above the critical threshold of 15% where breakups typically make sense and often attract activist investors, which GE already has in Trian," Dray writes. Dray also says GE's move could embolden other multi-industry companies such as Emerson (EMR -0.6%), Roper Technologies (ROP -0.0%) and 3M (MMM -0.3%) to push ahead with more aggressive portfolio simplification moves, and Eaton (ETN +0.4%) could continue down the path to reducing cyclicality by separating its vehicle business. "GE stock won't be dead money while the transformation continues," Root writes, citing a similar breakup of Siemens (OTCPK:SIEGY). Shares of Siemens Gamesa and Siemens Healthineers have returned nearly 20% annually over the past three years, Siemens Energy

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GE sum-of-the-parts analysis implies 20% upside, RBC analyst says