One Reason Why GE Stock Is Down Today
NEW YORK (TheStreet) -- Shares of General Electric (GE) - Get Report are slumping 2.01% to $31.42 early Monday afternoon as JPMorgan issued a bearish note about the company, Barron's reports.
The note comes after the Fairfield, CT-based company reported better-than-expected earnings for the 2016 second quarter, but was below targets for industrial orders.
"As usual the General Electric quarter contained a myriad of moving parts, but as the hysteria around transformation fades, and the focus shifts to actual numbers, what's left is a core, fundamental outlook for earnings and free cash flow that we think is at best stable, at worst deteriorating, and undoubtedly below consensus," the firm wrote in an analyst note cited by Barron's.
GE's third quarter is trending well below initial expectations with a big fourth quarter that has historically missed, according to JPMorgan.
"In our view, this profile, including high expectations which are now too high and worst-in-class FCF is neither safe nor deserved of a high multiple and we now see General Electric as a top underweight," the firm said.
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Separately, TheStreet Ratings Team has a "Hold" rating with a score of C+ on the stock.
The primary factors that have impacted the rating are mixed. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance and impressive record of earnings per share growth.
But the team also finds weaknesses including generally higher debt management risk, weak operating cash flow and poor profit margins.
Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
You can view the full analysis from the report here: GE