Barclays analyst Julian Mitchell upgraded General Electric (GE) to Overweight from Equal Weigh with an unchanged price target of $16.

The analyst says that while he does not yet know the magnitude of the 2018 guidance cuts, his talks with investors suggest they are braced for earnings per share of 75c for 2018, free cash flow of 50c, and a dividend cut of 75%-plus. Given that "substantial" restructuring announcements are likely in the near-term, further reductions to estimates "may soon draw to a close as restructuring savings are realized," Mitchell tells investors in a research note partially titled "Phoenix may start to emerge from the flames."

In addition, the analyst believes the value of GE's Aviation and Healthcare units is equivalent to its entire enterprise value. When deducting the company's Industrial net debt, this implies that at the current share price investors are getting all of GE's other assets, namely Power, Baker Hughes, Renewables, Lighting and Transportation, "for free," Mitchell contends. Further, he expects additional Power cost-cuts could yield $2B-plus of savings, and that the Baker Hughes (BHGE) stake is worth greater than $20B. This suggests "these other assets could start to look very undervalued," says Mitchell. His "Blue Sky" scenario implies upside to over $20 for shares of GE.

The stock in premarket trading is up 30c to $13.48.