|
|
|
|
||
GE Stock Is Dropping. Earnings Weren't So Bad -- Blame Boeing. -- Barrons.com GE Stock Is Dropping. Earnings Weren't So Bad -- Blame Boeing. -- Barrons.com Dow Jones By Al Root General Electric reported weak earnings. The Covid-induced aerospace depression is the reason. While the results were good enough to push Wednesday's premarket price higher, by the afternoon the stock had fallen 4%. Here is what Wall Street is saying about the company's second-quarter results. RBC analyst Deane Dray said the results were better than feared, noting that cash burn was smaller than expected. "Unsurprisingly, GE is keeping its full-year guidance framework suspended for now, given the heightened uncertainty in the macro. However, the company is optimistic that a sequential improvement in [second-half earnings] is achievable, and it reiterated its forecast for positive industrial [free cash flow] in 2021." Dray rates shares the equivalent of Buy and has a $9 price target for the stock. Gordon Haskett analyst John Inch isn't so bullish. He rates shares Hold, and his price target is $5, below where the stock trades. Inch sounds as if he will remain bearish on the stock. He has concerns about aerospace margins, which declined substantially year over year, and doesn't expect the aerospace aftermarket to bounce back quickly. Still he said the results matched low expectations. Barclays analyst Julian Mitchell said margin declines were in line with expectations, while also noting lower-than-expected cash burn. He rates shares Buy and has a $9 price target for the stock. Credit Suisse analyst John Walsh rates shares Hold with an $8 price target. He noted in a Wednesday research report that investor focus is on aviation, but said attention could shift to GE Power by the end off the year. "Power was modestly better than expected on cost savings." It's a bit of positive news about the future. Overall, it appears the results were about as good as could be expected. So why is the stock down? Investors can blame Boeing (BA). It also reported second-quarter results on Wednesday and announced reductions in airplane manufacturing. That means fewer parts and engines for suppliers to make. What's more, CEO Dave Calhoun said the second wave of Covid-19 infections had paused the recovery in commercial air travel. Boeing stock was down 2.6% Wednesday afternoon. Year to date Boeing and GE shares are down about 49% and 41%, respectively, far worse than comparable returns of the Dow Jones Industrial Average and S&P 500. |
return to message board, top of board |