General Electric (GE) could fall more than 10% soon as management likely cuts forward guidance and possibly even slashes the company dividend, Jim Cramer says.
"I think [GE] has to reset expectations much lower when it reports [earnings on Oct. 20], and perhaps even cut the dividend," Cramer said in an exclusive conference call with members of his Action Alerts PLUS club for investors. "That would take the stock to $20," or 13.3% below Wednesday's $23.07 close.
However, Cramer said the stock, which his charitable trust owns, could later rebound even after a dividend cut, "because [GE's] yield is almost the highest in the Dow."
He also believes new company CEO John Flannery -- who took over Aug. 1 from much-maligned former GE chief Jeffrey Immelt -- could turn around the beleaguered blue chip, whose stock price has basically gone nowhere in 20 years.
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