General Electric (GE -1.6%) will be able to reduce its debt "to far more acceptable levels by 2020" despite fears that the company's bonds could soon become junk-rated, says UBS analyst Steven Winoker, maintaining his conviction that the stock "presents a long-term capital appreciation opportunity."
While GE faces a number of risks to improving its leverage, and "it won't be quick, and it is likely to be volatile," but Winoker says he sees "a path to improvement for both leverage and valuation."
Winoker's outlook has GE garnering ~$33B from announced and coming asset sales while paying down $5.4B in debt and obligations and transferring $21B in cash to heavily levered GE Capital.
UBS rates GE as a Buy with a $13 stock price target.