One of the originals of the New York Stock Exchange was called into question about its earning power by an analyst at J.P. Morgan on Monday, resulting in uncertainty as to its price for the day.
J.P. Morgan's Stephen Tusa on Monday downgraded General Electric (NYSE: GE) shares to underweight from neutral and cut his 12-month price target to $5 from $6.
"We believe many investors are underestimating the severity of the challenges and underlying risks at GE, while overestimating the value of small positives, and with a 38% move in the stock year to date, and >50% cuts to forward fundamental FCF (free cash flow) anchors, we are cutting our [price target] and moving to" underweight, wrote Tusa in a note to clients.
Tusa first went negative on the stock in May 2016 before most on Wall Street. He then helped spur a turnaround in the shares in December when he upgraded the stock to neutral from underweight.
Once the nation's largest public company, General Electric has lost more than $200 billion in market value since 2017 as the American industrial company slowly unravels years of acquisitions under CEOs Jack Welch and Jeffrey Immelt.
The company introduced former Danaher CEO Larry Culp as its leader on Oct. 1, tasked with improving cash flow and shaping the struggling conglomerate into a leaner company.
Though stakeholders have been largely happy with Culp's management, some were disappointed last month when he revealed that the company could burn as much as $2 billion more in cash than it makes in 2019.
GE shares retreated 63 cents. Or 6.3%, to $9.38
