Why Shares of General Electric Are Falling Today
Shares of General Electric (NYSE: GE) traded down more than 7% on Wednesday as investors continue to digest a warning issued Tuesday from one of Wall Street's most prominent bears on the stock. J.P. Morgan analyst Stephen Tusa earlier in the week called GE stock "the most expensive value trap we have ever seen," implying that he expects the shares to continue to drift lower in the quarters to come.
Late last week, General Electric withdrew its full-year 2020 guidance and warned that it expects earnings in the recently completed first quarter to come in "materially below" the target it had provided just a month before. The company did offer some reason for hope, saying it still expects industrial free cash flow to be near its prior guidance.
Tusa, a longtime pessimist on the stock, in a note following the GE update warned against investors interpreting the announcement as a statement that the worst is now behind the company. GE, Tusa wrote, is in "arguably worse position on industrial fundamentals today" than it was in 2008 and 2009.
Source Fool.com