General Electric Co.'s (GE) - Get Report Chief Executive John Flannery hinted on Tuesday, Jan. 16, that he is looking at further dismantling the 125-year-old industrial conglomerate, a move that some Wall Street analysts believe to be unlikely.

"We believe that despite the market chatter, notions of GE breaking up ultimately carry low probability and serve as a deflection from GE's significant underlying problems," Deutsche Bank analyst John Inch wrote in a Jan. 17 research note.

Flannery, who was installed as CEO in August 2017, said on Tuesday that he has been examining the company's portfolio and its structures to ensure that each business has the strategic flexibility to maximize potential and value.

"I believe there could be different structures that can achieve all of those objectives and that we need to examine those," Flannery said during a conference call with analysts on a Jan. 16.

A breakup of the Boston-based company would come just a couple months after Flannery unveiled a roadmap to right the ship, by focusing on three of its biggest businesses: Aviation, Power and Healthcare. The CEO also announced plans to divest about $20 billion of the conglomerate's operations, including GE's legacy locomotives business.

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Investors, including activist investor Nelson Peltz and his Trian Fund Management, have pressured GE to conduct a more thorough restructuring review. The company could announce a decision on a breakup as early as this spring, CNBC and the Wall Street Journal reported, citing unnamed sources.

Still, as Deutsche Bank's Inch noted, there are several considerations that could impede the breakup process. The analyst said that GE Industrial supports all of GE Capital's $97.5 billion in debt and "a separation of GE could carry serious ramifications in the bond market on which GE continues to heavily rely." The company with a market capitalization of $150 billion is on the hook for more than $31 billion of underfunded pension obligations. The company also needs cash, Inch said, "separating out aviation and healthcare (relatively robust cash generators) could strand substantial liabilities with the Power business that could face years of long-term fundamental pressures."

Deutsche Bank has a Sell rating on GE stock with a $15 price target.

Separately, J.P. Morgan analyst Stephen Tusa said breakup talks are "not about offensive value creation," but are "more an acknowledgment that the problems preclude the company from moving forward as previously planned, even a few months ago."

Tusa has a $16 price target on GE shares, but said the "support is eroding" as he suspects that "there are many dis-synergies not incorporated in our analysis that shows a range in value $12 to $16 per share."

If GE pursues a breakup, the value based on sum-of-the-parts analysis ranges from $11 to $15 a share all the way up to $23 a share, CNBC reported on Wednesday.

Oppenheimer analysts Christopher Glynn and Patrick Schuchard calculated a $16 a share value from Aviation/Healthcare, $2 a share for Power/Renewables, and $3 a share for the Baker Hughes (BHGE) - Get Report stake. The analysts, however, said that the sum-of-the-parts exercise "remains speculative." Oppenheimer rates GE stock at Underperform.

To be sure, "a sum-of-the-parts analysis is difficult to properly examine given both the cash flow concerns and the opaqueness of earnings," TheStreet's Jim Cramer wrote in a note to Action Alerts PLUS subscribers. "Power, Aviation, and Healthcare are considered to be the heart of General Electric, so more must be known how each fit into Flannery's plans in the event he decides to pursue a potential spin or sale of assets."

General Electric is holding in Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio. Want to be alerted before Cramer buys or sells GE? Learn more now.

Shares of GE fell 4.6% to $17.36 at 11 a.m. EST on Tuesday.

Investors will now turn their attention toward next week, as General Electric is scheduled to report quarterly financial results on Wednesday, Jan. 24 before the opening bell, for any additional insight on the possibility the industrial giant may break up.

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