Log in
Forgot password ?
Become a member for free
Sign up
Sign up
Dynamic quotes 

4-Traders Homepage  >  Equities  >  Nyse  >  General Electric Company    GE

Mes dernières consult.
Most popular
News SummaryMost relevantAll newsSector newsTweets

General Electric : GE Shares Have a Second Bad Day

share with twitter share with LinkedIn share with facebook
share via e-mail
11/14/2017 | 11:28pm CET
By Thomas Gryta 

General Electric Co. shares tumbled 5.9% on Tuesday, causing the conglomerate to lose its crown as the biggest U.S. industrial company as Wall Street digests a turnaround plan announced Monday.

GE's new chief executive, John Flannery, said Monday the company would cut its dividend in half and shed multiple divisions, and that it may take years for a recovery. The lack of a dramatic move, such as a breakup or its dropping a major division, and the long timeline isn't sitting well with investors who waited four months for the plan.

"It will take a long time to work through GE's operations toward eventually turning its fortunes around," said Deutsche Bank analyst John Inch. The dividend cut was steeper than Wall Street expected, he said, which could exacerbate the selloff "as retail investors who previously counted on the GE dividend look elsewhere."

More than 40% of GE's common shares are owned by retail investors, Mr. Inch said.

GE shares fell to $17.90 Tuesday -- after falling 7.2% Monday -- and are down 43% for the year. Its shares have closed down 127 out of the 220 trading days this year.

The decline has left GE with a market value of $155.23 billion, while Boeing Co. shares have enjoyed a 68% gain this year, leaving GE behind as Boeing's market cap reached $155.9 billion. A year ago, GE was worth about $270 billion while Boeing was valued at $92.6 billion.

Several investors said short sellers were active in the stock, a strategy that is now cheaper with the lower dividend.

Short sellers borrow a stock and then sell it, betting its price will drop so it can be repurchased at a lower price and returned to the lender. If a stock pays a dividend, the short seller doesn't get that dividend but must compensate the lender for it. A lower dividend generally reduces that cost.

One New York hedge-fund manager said "everyone on Wall Street" was betting on further GE declines. Now investors are trying to decide on the appropriate multiple for the lower outlook, whether the outlook is credible and where GE could end up if the economy slows down, the person said.

RBC Capital analyst Deane Dray downgraded GE stock to sector perform from outperform, citing the unexpected length of a turnaround.

"While the market was not expecting any quick fixes, we believe that CEO John Flannery's highly anticipated plan fell short of expectations regarding the scope of the business model/portfolio changes," Mr. Dray said, in a note to clients.

Nicholas Heymann, an analyst with William Blair & Co. who still has an outperform rating on the stock, is less pessimistic. He sees the shares under pressure for a few weeks, but expects it to settle around $20 to $21.

GE is now working to convince investors of its plans. Both Mr. Flannery and Chief Financial Officer Jamie Miller on Tuesday defended the dividend cut as a necessary step, so the extra cash can be allocated in different and more flexible ways.

Ms. Miller stressed that this is just the beginning.

"This is where we are starting," she said, "but look, there's going to be updates over the next two or three years on our views as we evolve."

--David Benoit contributed to this article.

Write to Thomas Gryta at [email protected]

share with twitter share with LinkedIn share with facebook
share via e-mail
08:33p BOEING : Kazakhstan to purchase Boeing planes, build new GE locomotives
07:29p GENERAL ELECTRIC : GE's 2018 gains wiped out as worries about turnaround plan pe..
06:42p Rolls-Royce shares jump as commercial marine business goes on block
06:42p Rolls-Royce shares jump as commercial marine business goes on block
06:27p GENERAL ELECTRIC : For GE, a Breakup Is No Quick Fix
05:17p FIRST GE, NOW ROLLS-ROYCE : Engine Maker Considers Spinoff -- Update
03:39p Rolls-Royce to Exit Commercial Marine Business in Restructuring -- Update
02:09p GENERAL ELECTRIC : GECAS Arranges Sale-Leaseback Plus PDP Financing for 10 A320c..
02:02p GE TRANSPORTATION : Signs Locomotive and Service Agreements Valued over $900 Mil..
12:01p GENERAL ELECTRIC : Crisis talks on general electric
More news
News from SeekingAlpha
03:10p GENERAL ELECTRIC : Massive Disappointment
02:22p GE continues lower as analysts see problems with potential breakup
01:57p GE : On A Wing And A Prayer
01:23p General Electric (GE) Reports on Insurance Update - Slideshow
08:38a Trian behind push to breakup GE
Financials ($)
Sales 2017 124 B
EBIT 2017 10 882 M
Net income 2017 7 225 M
Debt 2017 68 338 M
Yield 2017 4,87%
P/E ratio 2017 24,67
P/E ratio 2018 19,07
EV / Sales 2017 1,82x
EV / Sales 2018 1,70x
Capitalization 158 B
Duration : Period :
General Electric Company Technical Analysis Chart | GE | US3696041033 | 4-Traders
Technical analysis trends GENERAL ELECTRIC COMPANY
Short TermMid-TermLong Term
Income Statement Evolution
Mean consensus HOLD
Number of Analysts 16
Average target price 21,2 $
Spread / Average Target 17%
EPS Revisions
John L. Flannery Chairman & Chief Executive Officer
Daniel Janki Treasurer & Senior VP-Global Operations
Jamie S. Miller Chief Financial Officer
Jim Fowler Chief Information Officer
Victor Abate Chief Technology Officer & Senior Vice President
Sector and Competitors
1st jan.Capitalization (M$)
3M3.87%145 769
SIEMENS5.90%128 010