GE Stock Looks Like It Has Turned a Corner. This Bear Disagrees. | GE Message Board Posts


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Msg  7262 of 7293  at  7/27/2022 7:21:22 PM  by

jerrykrause


GE Stock Looks Like It Has Turned a Corner. This Bear Disagrees.

GE Stock Looks Like It Has Turned a Corner. This Bear Disagrees.
 

General Electric reported better-than-expected earnings, much to the the relief of its investors. Shares rallied, but not everyone believes the stock is out of the woods.

GE (ticker: GE) reported adjusted per share earnings of 78 cents for the second quarter on Tuesday. Wall Street was looking for 37 cents. The company also maintained full-year earnings guidance, even though it said earnings were trending toward the low end of the company's range of $2.80 to $3.50 a share.

Low-end targeting wasn't a surprise. Wall Street is modeling about $2.80 in 2022 per-share earnings. GE also reduced its 2023 expected free cash flow by about $1 billion from a prior midpoint of about $6 billion, making the new guidance around $5 billion. The Wall Street consensus is $6.5 billion.

J.P. Morgan analyst Stephen Tusa doesn't see many reasons to be encouraged after the quarterly report.

"In the end, the story here is playing out more or less how we expected," wrote Tusa in a Thursday report. He expected pressure on free cash flow in 2022, and he expects free cash flow in 2023 to be only about $2.6 billion.

Despite the cash flow guidance cut and more tempered earnings views from management, GE shares rallied 4.6% Tuesday even as the S&P 500 and Dow Jones Industrial Average dropped 1.2% and 0.7%, respectively. On Wednesday, GE stock fell 0.9% to $70.87.

Tusa rates shares Hold, but has a Street-low $50 price target for shares. Not everyone is that bearish. Citigroup analyst Andy Kaplowitz rates shares Buy. His price target is $91 a share. "We still view GE overall as poised for sustainable improvements in topline, earnings, and [free cash flow]," wrote the analyst in a Wednesday report.

RBC analyst Dean Dray also rates GE shares Buy. His price target is $94 a share.

Dray wrote Wednesday that he was surprised by the strength in many GE business units. Orders in the second quarter came in higher than sales, and the Aviation division reported better revenue and operating profits than Wall Street had modeled.

Overall, about 68% of analysts covering GE stock rate shares Buy. The average Buy-rating ratio for stocks in the S&P is about 58%. The average analyst price target is about $90, roughly 26% above where the stock closed at on Tuesday.

Coming into Wednesday trading, shares are down 24% year to date and off about 38% from their 52-week high of more than $116 a piece.

 


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Msg # Subject Author Recs Date Posted
7263 Re: GE Stock Looks Like It Has Turned a Corner. This Bear Disagrees. margin321 1 7/29/2022 1:08:27 PM




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