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General Electric (GE - Get Report) shares traded lower Friday after JPMorgan analyst Stephen Tusa argued the group's aviation unit offers "less growth with greater risk" as the group continues to struggle with its ongoing turnaround strategy.

Tusa, who carries a $5 price target with an underweight rating on GE stock, said that investors were underestimating risks linked to GE Aviation, specifically given its exposure to Boeing and the high reliance it has on the commercial aircraft engines segment. Tusa also noted that GE Aviation's balance sheet "looks too small to take on liability burden" and has "less capital cushion than many assume". He estimates the division is worth around $30 billion, less than a third of its major engine-making peers.

Tusa has earlier noted challenges in GE Aviation, arguing in August that it would need to see a 35% improvement in its military business in order to meet profit guidance levels provided by the company.

"After an in depth review of structural dynamics around the fundamentals and financials, we stand by our view that GE Aviation offers materially less growth with greater risk, and therefore less value support, than consensus assumes," Tusa said Friday.

"By studying peer company balance sheets to help inform what GE Aviation's should look like, we see less capital cushion than many assume, despite what should have been a flow of pre-delivery payments, though likely impacted by the use of working capital solutions, and up-streaming of cash to corporate to help make up for shortfalls at GE Capital/Power," he added.

GE shares were marked 1.05% lower at the start of trading Friday to change hands at $8.58 each, a move that would extend the stock's six-month decline to around 14.2%.

GE boosted its full-year profit guidance after a better-than-forecast set of second quarter earnings figures in one of the best indications to date that CEO Larry Culp's turnaround plans are starting to gain traction.

Looking into 2019, GE said it sees adjusted earnings per share in the region of 55 cents to 65 cents per share, and altered its forecast for industrial free-cash flow to a range of negative $1 billion to positive $1 billion.

"As previously discussed, the 737 MAX was originally outside the scope of our planning, and year-to-date it impacted our cash flow by about $600 million or $300 million per quarter.," CFO Jamie Miller told investors on a conference call following the group's July earnings release.

"However, for the first half improved performance at Power as well as better aftermarket sales, services billings and timing of discount payments more than outweigh the cash flow pressure at Aviation," he added. "In the second half, if the plane remains grounded, we anticipate a negative impact of roughly $400 million per quarter."

General Electric said its loss for the three months ending in June was pegged at 1 penny per share, or 3 cents per share when looking at continuing operations.

On an adjusted basis, however, GE earned 17 per share, a figure that compares to last year's 8 cent profit and a Street consensus forecast of 12 cents per share. Group revenues, GE said, fell 4.3% from last year to $28.8 billion, a tally that modestly topped analysts' forecasts of $26.6 billion.