GE 'most expensive value trap we have ever seen,' says J.P. Morgan's Tusa
Apr. 14, 2020 9:25 AM ET|About: General Electric Company (GE)|By: Carl Surran, SA News Editor
J.P. Morgan analyst Steve Tusa cuts General Electric's (NYSE: GE) stock price target to $5 from $6, a day after the company's surprise bond sale and debt buyback.
"For such a poor performing stock, GE has historically been, and remains, the most expensive value trap we've seen," Tusa says, adding that the company's bond issuance should not be taken as an "all clear."
GE's stock decline may be interesting to value buyers, "but while the stock is down, so is [free cash flow], by 100%+, while leverage has gone up."
2020-21 "may ultimately be the period of the most significant underperformance based on expectations at the end of '18 versus what they are now," Tusa says, while still rating the stock at Neutral. |
