The analyst Wall Street was waiting to hear from on GE breakup has spoken, and he's still skeptical

Published Wed, Nov 10 20216:06 AM ESTUpdated Wed, Nov 10 20218:30 AM EST

Jesse Pound @/in/jesse-pound @jesserpound

One of Wall Street's most authoritative voices on GE said Wednesday that the company's plan to split itself off in three pieces won't be enough to give shareholders a major return. JPMorgan analyst Stephen Tusa, who has a neutral rating on the stock and has long been skeptical of GE's turnaround plans, said in a note to clients that GE's stock seemed likely to pull back as the details of its spinoff plan become more clear. "Bottom line, prior attempts at portfolio 'value creation' have fallen victim to weak underlying details versus the historically positive narrative under the GE umbrella. Most spins tread water between announcement and consummation, but a flat stock is the best case to us - even the Bull math is less than 10% upside," Tusa wrote. GE announced Tuesday it was splitting itself into three different companies , focused on aviation, health care and power. The move was met with positive reactions on Wall Street, and the stock rose about 2.7% to close above $111 per share following the announcement, though it was much higher earlier. Shares of GE, which have underperformed for more than a decade, have now gained nearly 29% year to date and rose about 1% in premarket trading Wednesday. However, Tusa pointed to prior strategic moves from GE to show that the initial reaction could prove to be too optimistic about the value of the spinoffs. "Keep in mind that GE stock has reacted positively to almost every strategic announcement, partly due to a tightly controlled narrative. ... As the dust settles and details emerge, the asset value to the GE shareholder has almost every time come out materially worse," he said. Tusa did not change his formal price target of $55 per share. He estimated that the aviation company would be valued at at $43 per share, the health care firm at $23 per share and the power company at $8 per share, with the additional costs and lingering insurance concerns dragging the total value back below $70 per share combined. —CNBC's Michael Bloom contributed to this report.

Vincent Kessler | Reuters

One of Wall Street's most authoritative voices on GE