GE Risks Don't Need a Sell Rating to Spot
The challenges to its recovery are hiding in plain sight.
A new sell rating, same old risks.
Photographer: Michael Nagle/Bloomberg
General Electric Co. optimists just got their latest reality check.
Shares of GE slumped more than 8 percent on Monday after JPMorgan Chase & Co. analyst Steve Tusa laid out a case for why cash flow at the embattled conglomerate will remain depressed for the foreseeable future and advised investors to reduce their exposure to the stock. That pushed GE back below $10, erasing a March rally fueled by management promises of a meaningful recovery in free cash flow in 2020 and 2021. Investors bought into that optimism despite any clarity around what in fact meaningful actually meant and little in the way of actual numbers to back up that idea amid ongoing efforts to stabilize the power unit and unwind GE Capital financing programs.