JP Morgan's Stephen Tusa on GE's recent rally: 'The price is wrong'

A subsea oil and gas tree at the General Electric manufacturing plant in Montrose, U.K.
Simon Dawson | Bloomberg | Getty Images

J.P. Morgan analyst and longtime General Electric bear Stephen Tusa poured cold water on the industrial giant's recent stock run-up, saying in a note that "the price is wrong."

GE shares are up more than 33% over the past three months. The company on Oct. 30 hiked its 2019 cash flow outlook and reported quarterly results that beat analyst expectations. GE said it expects its free cash flow — a closely watched efficiency gauge for companies — to range between flat and $2 billion for 2019.

But Tusa, who has an underweight rating on the stock, notes the company's persisting issues with its power and aviation units warrant a lower share price for General Electric.

"We view the deterioration in fundamentals at GE as reflecting structural challenges versus something more cyclical in which 'normal' is materially higher than where we are today," Tusa said in a note to clients.