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Home / Business / GE lagged on track for the most invalid day for 9 years after JPMorgan warns the worst yet to come

GE lagged on track for the most invalid day for 9 years after JPMorgan warns the worst yet to come



General Electric Co. shares tumbled nearly 10% on Friday to put them on track for their worst single decline since March 2009, after analyst Stephen Tusa, JPMorgan Chase & Co., has turned its share price target to $ 6 from $ 10 and said the industry's latest earnings were worse than expected on almost all fronts.

The stock price has hit the stock market due to its lowest end since March 2009, bringing its losses over the past month to about 40%, off of its latest earnings and rating downgrades from all three major credit card companies. [19659002] Tusa now has the lowest target for Wall Street analysts covering GE

GE, -8.24%

cemented its bearish reputation. Predictions free cash flow and EBITDA, or earnings before interest, taxes, depreciation and depreciation, moved significantly lower in GE's latest report, he said, while a significant change in the language from regulatory submission indicates a negative step down in influence.

"Some sell-side bulls now point to liquidity issues as the driver of stock price weakness, although this dislike Real Bear Case (RBC) ̵

1; namely $ 100 billion in debt and zero business free cash flow even after 95% dividend cut," wrote Tusa in a note. "While the stock is down at ~ 70% from the top of $ 30, this move still does not adequately reflect the basic facts, in our opinion."

GE missed earnings and income estimates in its last quarter, said it would cut its dividend and reorganize its power business. Finance Director Jamie Miller said in the earnings conversation that the problems hampered the company's staggering power business "going on longer and with deeper influence" than expected, which causes GE to "miss substantial" cash flow and earnings goals throughout the year, according to a transcript provided by FactSet.

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While management said they are still planning to utilize the balance, the company's 10-Q quarterly showed no references to $ 15 billion plus cash by the end of the year or $ 25 billion on industrial debt reduction, noted Tusa.

"Important, non-specific reference to generate $ 25 billion in cash from property reduction at GECS, not in line with our latest analysis showing that GECS asset value is translated by looking at surplus funds on that balance," he wrote.

Tusa expects a worsening of the base rate for interest rate risk to continue and predict that by 2020, six out of eight segments will show zero zero cash flow.

The planned restructuring is far from a "kitchen sink" approach, with only moderate workforce fees and cash conversion without keeping up with guidance, he wrote. Tusa is about 60% under the Wall Street consensus for 2019 and 2020, but believes further disadvantages are possible.

JPMorgan sticks with underweight on the stock.

Shares dropped 53% in 2018, while S & P 500

SPX, -0.88%

has increased 4% and Dow Jones Industrial Average

DJIA, -0.73%

has advanced 5%.


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