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General Electric (NYSE: GE) shares have been in flames since the company’s third-quarter earnings were hit in late October, but an analyst said Friday that positive news about Pfizer Inc.’s coronavirus vaccine makes GE even more interesting on its way to 2021.

The GE analyst: Bank of America analyst Andrew Obin reaffirmed his Buy rating and his $11 target price for GE.

The GE thesis: Obin said the potential for a return to normality in 2021 thanks to a coronavirus vaccine makes GE shares “more investable”.

Obin raised his adjusted EPS estimate for 2020 for GE from a loss of 22 cents to a profit of 2 cents. He has also raised his EPS estimate for 2021 from 29 cents to 34 cents.

“The chance of a return to an average FCF margin (as a percentage of sales) by 2022 is likely,” Obis wrote in a note.

He now forecasts a positive free cash flow of $4.7 billion in 2022, compared to a loss of $2.1 billion FCF in 2020.

GE reported that its energy and renewable energy segments will return to profitability as early as the third quarter. At the same time, Obin said that the losses in the GE Capital segment were limited. In addition, GE has set aside $100 million for ongoing SEC investigations of its insurance business, issues that Obin said have already been addressed by a $9.5 billion chargeback in 2017.

Obin said that the potential for a coronavirus vaccine, widely available in the second half of 2021, combined with GE’s recent operational improvements and FCF medium-term growth prospects, make GE stock a good buy, even after the recent rally.

Benzinga’s Take: GE investors are probably tired of hearing that after years of underperformance and lack of cash flow and profit figures, a turnaround is imminent. However, a vaccine against the coronavirus would largely eliminate the biggest headwind to GE’s turnaround story.

Source: (fool.com)