General Electric shares fall to lows unseen since March 2009 on Friday as J.P. Morgan slashes price target on the stock, maintains rating

November 12, 2018 7:55 am

Shares of General Electric Company (GE) retreated to lows unseen since March 2009 on Friday, after J.P. Morgan analyst Stephen Tusa revised down his price target from $10 to $6, while maintaining an ”Underweight” rating on the stock.

General Electric shares closed lower for a third consecutive trading session in New York on Friday. It has also been the steepest daily loss since October 30th. The stock went down 5.71% ($0.52) to $8.58, after touching an intraday low at $8.15, or a price level not seen since March 10th 2009 ($7.95).

Shares of General Electric Company have retreated 50.83% so far in 2018 compared with a 4.02% gain for the benchmark index, S&P 500 (SPX).

In 2017, General Electric’s stock plummeted 44.78%, thus, it again underperformed the S&P 500, which registered a 19.42% return.

According to Stephen Tusa, out of General Electric’s 8 reported segments, “all of which were profitable even 2 years ago, 6 are now likely either at or below zero in 2020.”

“While liquidity is certainly debatable, we believe this is not really about liquidity, it’s about a deterioration in run rate fundamentals,” J.P. Morgan’s Tusa wrote in a Friday research note, cited by Reuters.

“GE is a fundamentally strong company with a sound liquidity position. We are taking aggressive action to strengthen our balance sheet through accelerated deleveraging and position our businesses for success,” Jennifer Erickson, a spokesperson for General Electric, said in a statement following the research note.

The industrial conglomerate reported a loss of $22.8 billion during the third quarter, while also saying it was faced with a deepening federal accounting investigation.

According to CNN Money, the 18 analysts, offering 12-month forecasts regarding General Electric’s stock price, have a median target of $13.00, with a high estimate of $21.00 and a low estimate of $10.00. The median estimate represents a 51.52% upside compared to the closing price of $8.58 on November 9th.

The same media also reported that 11 out of 22 surveyed investment analysts had rated General Electric’s stock as “Hold”, while 8 – as “Buy”. On the other hand, 2 analysts had recommended selling the stock.

Weekly Pivot Levels

By using the traditional method of calculation, the weekly levels of importance for General Electric Company (GE) are presented as follows:

Central Pivot Point – $8.76
R1 – $9.36
R2 – $10.15
R3 – $10.75
R4 – $11.36

S1 – $7.97
S2 – $7.37
S3 – $6.58
S4 – $5.80

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