- General Electric (GE -1.6%) tumbles to within ~$0.50 of its 52-week low as J.P. Morgan analyst Stephen Tusa reiterates his bearish view, suggesting that just because the stock keeps getting cheaper does not make it more attractive.
- Tusa says as the stock's weakness continues, investors and analysts appear to try to create a bullish narrative based mostly on how far the stock has fallen, but analysts have been careful not to raise their ratings, which he believes "defines sentiment on the stock, which is somewhere between somewhat negative, and what we would characterize as 'chicken bullish'... essentially a denial that fundamentals could be this bad, and there is nothing that simple cost saves can't take care of, something that was not obvious to the previous 15 years of management."
- In his earlier bearish note, Tusa looked at GE and saw "a core operating performance that is below plan, and, currently, a consensus expectations curve that we think remains too high, [free cash flow] that is the weakest in the sector, and, with that backdrop, a valuation that is expensive, with limited incremental catalysts to change the narrative."
- JPM rates GE at Underweight with a $22 price target; shares, which closed at a two-year low $23.72 on Sept. 11, has fallen 24% YTD.
- Now read: GE: A State Of Flux
Original article