General Electric (NYSE: GE) investors are not having a great year.
“Thanks” to the arrival of COVID-19 and the damage it has caused to global trade in general and the demand for airplanes (and aircraft engines) in particular, GE’s inventory has fallen further. by 20% in the last 52 weeks, against an S&P 500 i.e. high more than 20%.
And today, GE gets another shellacking, down 5% at 2:20 pm EDT.
You can almost certainly blame JPMorgan for this.
The investment banker announced this morning that he was turning “more negative” on GE shares and withdrawing his target price on the share, TheFly.com reports. It sounds bad, but it gets worse. Although JP no longer has official GE stock price target, he says he thinks GE stocks are probably worth less than $ 5.
GE stock currently costs $ 6 and is changing now, by the way. So in essence, while JP technically has a “neutral” rating on the stock, in fact the analyst appears to be seeing more than a 20% drop.
Why Is JPMorgan So Suddenly Negative on General Electric Stock? On the one hand, JP points out that management has refused to promise that cash flow will be positive in the second half of this year, despite many analysts predicting that cash flow will be “solidly positive”.
In JPMorgan’s view, this likely means that there has been “no resets” in the business, that the permanent consensus V-shaped recovery for GE’s business is almost certainly wrong, and that the company will be lucky enough to just break even within a second. half.
All of this gives investors many reasons to sell GE shares today – and very few reasons to buy.