Is the worst really over for GE? Maybe not, according to J.P. Morgan.

General Electric Co.'s (GE) finance arm, GE Capital, still presents a risk and may need additional capital to support the business.

"We believe GE Capital remains an underappreciated risk, and if the aim is to 'de-risk,' which was the new language from [the 2018 Electrical Products Group Conference], the math suggests more capital may be needed, even without another charge from lingering liabilities," J.P. Morgan analyst Stephen Tusa wrote in a May 30 research note.

"In total, to get to ratings agencies' targets we see either about $22 billion in incremental asset wind down versus standing plan, or an approximately $3 billion capital contribution," Tusa explained.

The firm maintained its Underweight rating and $11 price target on GE shares.

GE declined to comment on Tusa's note. In 2015, GE trimmed GE Capital's business to create a simpler company focused on its core industrial operations. In October of that year, GE sold GE Capital's commercial lending and leasing business, with approximately $32 billion in assets, to Wells Fargo & Co. (WFC) .

Chief Executive Officer John Flannery discussed his plan to "de-risk and de-lever" the company at the Electrical Products Group Conference on May 23, specifically noting that management is focused on reducing the asset size at GE Capital and its exposure to the insurance business.

Flannery, who was installed as CEO in August 2017, said the company is shrinking its assets, mainly divesting its energy and industrial assets, and the process is "going well." Thus far, he's discussed $15 billion of asset reductions, of which he expects to have about half of the $15 billion announced or closed this year.

But the insurance business presents the potential for future liabilities, particularly as it pertains to long-term care. The Boston-based industrial conglomerate stunned investors and analysts in mid-January when it announced it would book a $6.2 billion charge to its fourth-quarter earnings due to weakness in its North American Life & Health insurance portfolio. The company also said GE Capital would make payments worth $15 billion over the next seven years to shore up NALH's statutory reserves. The first installment payment of $3.5 billion was made in the first quarter.

"While many are discounting January's insurance charge as one of the last 'shoes to drop' at GE, we view it as more of a wake-up call around a [General Electric Capital Services] book that continues to operate with the burden of a systemic approach to making short-term earnings look better with ultimately uneconomic long-term moves," Tusa said.

But at the EPG Conference, Flannery insisted GE Capital has "strong liquidity," saying it had about $22 billion at the end of the first quarter.

"We see that at about $10 billion at the end of the year and $5 billion-plus 2020 and beyond," Flannery said. "So, as we look at oncoming liability maturation, making insurance payments and things like that, we have the liquidity inside the business to manage that."

That said, just over a month ago, ratings giant Moody's lowered GE's ratings outlook to negative and moved GE Capital's standalone credit profile into junk bond territory. Moody's cut GE Capital's rating from Baa3 to Ba1, citing further weakening of the company's capital position.

Bloomberg Intelligence analyst Joel Levington said at the time that the rating differential between the GE and GE Capital "underscores the necessity for parental support to help ensure access to funding at a reasonably low cost."

Shares of GE fell 0.5% to $14.11 at 11 a.m. New York time.