{"id":33310,"date":"2025-10-24T13:35:22","date_gmt":"2025-10-24T11:35:22","guid":{"rendered":"https:\/\/news.banquerichelieu.com\/?p=33310"},"modified":"2025-10-24T13:36:39","modified_gmt":"2025-10-24T11:36:39","slug":"weekly-radar-week-40","status":"publish","type":"post","link":"https:\/\/news.banquerichelieu.com\/en\/2025\/10\/24\/weekly-radar-week-40\/","title":{"rendered":"Weekly Radar – Week 40"},"content":{"rendered":"\n
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  1. General Electric: the rebirth of the most iconic industrial conglomerate in the United States<\/strong><\/li>\n\n\n\n
  2. BNP Paribas: the fine that revives<\/strong> the spectre of legal risk<\/strong><\/li>\n<\/ol>\n\n\n\n

    US EQUITIES<\/strong><\/h2>\n\n\n\n

    General Electric: the rebirth of the most iconic industrial conglomerate in the United States<\/strong><\/p>\n\n\n\n

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    • In September 2025, General Electric’s share price surpassed its historic high reached in 2000. On October 21, 2025,\u00a0<\/strong>the publication of its resultsconfirmed the turnaround<\/strong>\u00a0that began in 2018.<\/strong><\/li>\n\n\n\n
    • Founded in 1892<\/strong>, General Electric is one of the oldest companies in the United States. It was one of the original members of the Dow Jones Index in 1896, then a continuous member of the index from 1907 to 2018.\u00a0GE was a leading player in many technological revolutions throughout the 20th century<\/strong>: light bulbs, electric train engine, X-ray machines, household appliances, turbines, and more. GE also experienced stock\u00a0market euphoria in 2000<\/strong>, fueled by its iconic CEO\u00a0Jack Welch<\/strong>. In 2000, GE had the second-largest market capitalization in the S&P 500 after Exxon. Between 2000 and 2018, GE was a sprawling conglomerate with poor management, facing competition and depression in several of its end markets (gas turbines, electric train engine, oil equipment and services, insurance, and finance).<\/li>\n\n\n\n
    • When\u00a0Larry Culp<\/strong>\u00a0took over as CEO and chairman of GE in\u00a02018<\/strong>,\u00a0becoming the first outsider to head the group, it was burning $1.6 billion in FCF, had $39 billion in financial net debt, and had just cut its dividend by almost half.\u00a0The stock was trading at a low of $32.<\/strong>\u00a0In 2025, GE Aerospace<\/strong>, the leader in aircraft engines and the new name for GE following the spin-offs of GE Vernova and GE Healthcare, is expected to generate a FCF of $7 billion. Its share price has increased\u00a09.5x in seven years and is up 82% since the beginning of the year<\/strong>. On October 21, 2025, GE Aerospace reported revenue of $30.5 billion and\u00a0FCF of $6 billion for the first nine months<\/strong>\u00a0of 2025, up 21% and\u00a027% respectively<\/strong>.<\/li>\n\n\n\n
    • This publication shows that GE continues to\u00a0reap the benefits of Larry Culp’s restructuring<\/strong>,\u00a0enjoying growth in civil and military aviation<\/strong>, and above all the\u00a0commercial success of its CFM56 and LEAP engines<\/strong>, co-developed with Safran, one of the most profitable industrial products in the world.<\/li>\n\n\n\n
    • Today, cash generation stems from mainly from the maintenance of\u00a0CFM56<\/strong>engines installed since the early 1980s. The technical choices made by GE and Safran have proven to be more judicious than those of Pratt & Whitney (RTX group), its only competitor for modern single-aisle aircrafts.\u00a0The LEAP engine dominates the engine market of the A320neo (Airbus), 737MAX(Boeing) and, in the future, COMAC’s C919(Chinese).<\/strong>\u00a0Available since the early 2010s, the LEAP’s commercial life is expected to continue for several decades thanks to lucrative maintenance contracts.\u00a0For every $1 of engine sales, GE and Safran expect $3.5 in revenue over 20 years of service<\/strong>. However, GE and Safran continue to invest in R&D: they are developing\u00a0their next engine<\/strong>. It is scheduled to enter into service around\u00a02035<\/strong>\u00a0and is expected to generate fuel savings of 20% compared to the LEAP.<\/li>\n<\/ul>\n\n\n\n

      EUROPEAN EQUITIES<\/strong><\/h2>\n\n\n\n

      BNP Paribas: the fine that revives<\/strong> the spectre of legal risk<\/strong><\/p>\n\n\n\n

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      • BNP Paribas was ordered by a New York jury to\u00a0pay nearly $21 million in damages to three Sudanese refugees<\/strong>\u00a0for transactions orchestrated by its Geneva office that indirectly financed Omar al-Bashir’s regime in Sudan between 2002 and 2008.<\/li>\n\n\n\n
      • While this decision seems to echo the huge fine ($9 billion) imposed on the group in 2014 for conducting dollar transactions with Cuba, Iran and Sudan under US embargo, the current case is at a different level of jurisdiction. The regulatory aspect related to US sanctions has been settled since 2014, but civil actions were made possible in 2019 by the US Court of Appeal and a 2024 decision allows the main complaints to proceed to trial. This is therefore no longer a criminal prosecution but a private dispute. BNPP is surprised that essential evidence was not presented during the first instance and\u00a0will appeal.<\/strong>\u00a0The verdict will be returned by three judges and BNPP will argue for the application of Swiss law (the Swiss government itself has confirmed that the liability sought has no legal basis).<\/li>\n\n\n\n
      • BNP Paribas shares fell sharply (-15% in three trading sessions), with themarket fearing that this decision could encourage thousands of Sudanese refugees<\/strong>\u00a0in the United States to take similar action, either collectively or individually. According to BNPP, it seems unthinkable to extrapolate the current fine to the 20,000 or so potential claimants (who will likely have to be dealt with on a case-by-case basis), nevertheless, a Bloomberg article\u00a0envisages a fine of $10 billion<\/strong>\u00a0(a scenario in which each claimant would receive $500,000),equivalent to the destruction of market capitalisation<\/strong>\u00a0recorded since the conviction<\/strong>.<\/li>\n\n\n\n
      • Despite the\u00a0group’s confidence<\/strong>, it is difficult to assess their chances of winning on appeal; this dispute therefore\u00a0clearly calls into question the visibility of the investment case.<\/strong><\/li>\n\n\n\n
      • Such controversy\u00a0increases the cost of equity<\/strong>\u00a0(legal and reputational risk) and\u00a0reignites discussions about the minimum level of capital adequacy<\/strong>, which is already rather low compared to some peers (Core Tier 1 target of 12% in 2025 and 12.5% in 2027). A fine of $10 billion (hitting Core Tier 1 by 1%) would cause them to fall below their target. One of the\u00a0possible measures to strengthen their capital levels<\/strong>\u00a0would therefore be to\u00a0cancel their share buyback program<\/strong>\u00a0or even\u00a0sell off assets<\/strong>.\u00a0<\/li>\n\n\n\n
      • Despite its\u00a0current very attractive valuation<\/strong>\u00a0(2025 price-to-book ratio of 0.65x, on a par with Soci\u00e9t\u00e9 G\u00e9n\u00e9rale, which nevertheless has a lower return on tangible equity, ROTE), isn’t the stock\u00a0\u201cdead money\u201d until the appeal<\/strong>\u00a0decision (not for several months)? Until then, the share price remains\u00a0dependent on potentially negative news flow<\/strong>\u00a0(possible class action, appeal delays, provisions, etc.).<\/li>\n\n\n\n
      • Against the backdrop of France’s sovereign rating downgrade, which is not helping the attractiveness of domestic banks, we believe that the stock is likely to\u00a0lack catalysts for a rerating in the short term<\/strong>. We will certainly have to\u00a0wait for a clearing event<\/strong>\u00a0before the solid fundamentals are reflected in the valuation again.<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"

        US EQUITIES General Electric: the rebirth of the most iconic industrial conglomerate in the United States EUROPEAN EQUITIES BNP Paribas: the fine that revives the spectre of legal risk<\/p>\n","protected":false},"author":1,"featured_media":33312,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":"","_links_to":"","_links_to_target":""},"categories":[66],"tags":[],"class_list":{"0":"post-33310","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-macro-markets"},"acf":[],"_links":{"self":[{"href":"https:\/\/news.banquerichelieu.com\/en\/wp-json\/wp\/v2\/posts\/33310","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/news.banquerichelieu.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/news.banquerichelieu.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/news.banquerichelieu.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/news.banquerichelieu.com\/en\/wp-json\/wp\/v2\/comments?post=33310"}],"version-history":[{"count":1,"href":"https:\/\/news.banquerichelieu.com\/en\/wp-json\/wp\/v2\/posts\/33310\/revisions"}],"predecessor-version":[{"id":33311,"href":"https:\/\/news.banquerichelieu.com\/en\/wp-json\/wp\/v2\/posts\/33310\/revisions\/33311"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/news.banquerichelieu.com\/en\/wp-json\/wp\/v2\/media\/33312"}],"wp:attachment":[{"href":"https:\/\/news.banquerichelieu.com\/en\/wp-json\/wp\/v2\/media?parent=33310"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/news.banquerichelieu.com\/en\/wp-json\/wp\/v2\/categories?post=33310"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/news.banquerichelieu.com\/en\/wp-json\/wp\/v2\/tags?post=33310"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}