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Chinese trade negotiators suddenly canceled a visit to meet U.S. farmers after they wrapped up trade talks in Washington this week.Marketsread more
Canadian trade union Unifor said roughly 4,500 of its members have been temporarily laid off because of the GM strike so far.Autosread more
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Walmart is the latest to pull back from the industry. Federal regulators said they will soon ban flavored e-cigarettes while some nations have outlawed the products...Health and Scienceread more
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Solomon launched Payback Records last year as his music career was picking up.Financeread more
A group of 23 states on Friday sued to undo the Trump administration's determination that federal law bars California from setting stiff tailpipe emission standards and...Transportationread more
U.S. officials, including Secretary of State Mike Pompeo, have accused Iran of orchestrating devastating strikes on Saudi oil installations over the weekend.Politicsread more
The rough year so far for General Electric investors will not end anytime soon, according to a top Wall Street firm.
JPMorgan reaffirmed its underweight rating on the industrial giant's shares, saying earnings and business trends continue to deteriorate
"We see a core operating performance that is below plan, and, currently, a consensus expectations curve that we think remains too high, FCF [free cash flow] that is the weakest in the sector, and, with that backdrop, a valuation that is expensive, with limited incremental catalysts to change the narrative. ... While visibility is low, we see downside risk to our well below consensus estimates," analyst Stephen Tusa wrote in a note to clients Thursday entitled "Preparing for the Fall: It's worse than we think."
We view $24 "as a ceiling as opposed to a floor prior, with something in the high teens as an 'investable fair value,'" he added.
The company named John Flannery as its new CEO in June succeeding Jeff Immelt in a long-awaited management shake-up. But even with the leadership change, General Electric shares continued to significantly underperform the market. The stock has declined 21 percent year to date through Wednesday versus the S&P 500's 10 percent return.
GE shares fell more than 2 percent on Thursday after the JPMorgan report, weighing on the whole Dow Jones industrial average.
The analyst cited poor fundamentals in the company's power business, a meager turnaround in its oil and gas and transportation segment and pension costs as reasons for his negative outlook for General Electric.
Tusa reiterated his year-end $22 price target for General Electric shares, representing 12 percent downside to Wednesday's close.
"Ultimately, we expect the company to migrate consensus closer to cash EPS and, importantly, do not view this level of FCF [free cash flow] as depressed," he wrote. "The mosaic here essentially validates our thesis in direction but the magnitude is worse than we have been assuming."
The company declined to comment on the research report.