General Electric is set for better performance as the company's leadership works to break off segments of the business, Oppenheimer said in upgrading shares of the industrial conglomerate to perform from underperform.

The announced spinoff of GE's health-care unit and the pending $11 billion merger of its transportation business with Wabtec should provide much-needed cash for executives to work with, Oppenheimer's Christopher Glynn said in a note Tuesday.

GE also plans to reduce its net debt by about $25 billion by 2020 and generate $500 million or more in cost savings by the end of 2020.

"We are upgrading shares to perform rating from underperform, based on potential for portfolio plan to unlock some value, and diminish liabilities," Glynn wrote to clients. "GE can reduce net leverage by $25 billion by 2020, from Healthcare liability transfer (debt and pension) allocation of $18 billion gross and meaningful planned liquidity from break-up moves."

Shares rose 4.1 percent Wednesday following the upgrade from Oppenheimer.

Wall Street applauded chief executive John Flannery's decision to break off the company's health-care unit and separate its stake in oil services company Baker Hughes on Tuesday, when shares rallied more than 7.7 percent, their best day since April 2015.

The upward climb in the stock price is a welcome reprieve for company management. GE shares are down 21 percent in 2018 and down nearly 50 percent over the past year as the company has attempted to focus on a small number of core segments.

The CEO , "We are finished" when he was asked whether GE will be making any other restructuring moves.

The turnaround plan came on the same day General Electric was removed from the Dow Jones Industrial Average and replaced by Walgreens Boots Alliance.

Clarification: This story was revised to clarify that the Oppenheimer upgrade was issued Tuesday.