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When analysts issue flash research notes after earnings or other key news events, it is no unheard of that their initial stance gets muted or reversed. After all, analysts are people and sometimes they change their minds like the rest of us. That being said, in the case of General Electric Co. (NYSE: GE) there was a major analyst reversal in a very short period, which might throw many GE investors off on first look.

GE’s earnings report came out on Friday morning and the flash call from Andrew Obin was still a Buy rating and a $35 price objective. Then on Tuesday, Obin’s call sounded drastically different — and now Merrill Lynch is a far cry from being among the most bullish on GE.

Merrill Lynch has now downgraded GE shares to Neutral from Buy, and Obin’s price objective was cut to $31 in the call. The main concern here is that Obin now feels investors should move to the sideline until earnings expectations are brought down.

GE had originally targeted $2.00 in earnings per share in fiscal year 2018. At $1.72 in earnings per share for 2018, Merrill Lynch is now under the consensus estimate that is closer to $1.90 per share. Obin does note that investors were already discounting that $2.00 per share target, but not by enough.

Tuesday’s call views GE’s free cash flow conversion disconnect as reflective of the reinvestment cycle. The firm sees fair valuation at a trough of the free cash flow cycle. Tuesday’s investment rationale looks quite different from the flash note issued a couple of days before:

• NEW RATIONALE — We think GE is well positioned in the long-run as reinvestment cycle and strategic acquisitions (Alstom, BHI) should pay off in the form of outgrowth vs peers and runway on margin expansion. However, we do not see the stock outperforming in the face of negative earnings revisions and an expected larger cut to 2018 expectations yet to come.
• LAST WEEK’s RATIONALE — We forecast GE to post double-digit EPS growth in its Industrial business, which puts it as one of the highest growth large-cap Industrial names. The April 10 announcement of a staged exit of most GECC businesses may translate to more regulatory visibility at GECC, allowing it to upstream more capital to the parent and GE utilizing its industrial balance sheet more efficiently.

As far as earnings drivers, Obin warned:

There are a number of drivers for the earnings reset over the past two years, including Oil & Gas downturn (GE tends to be a later-cycle exposed business in the space), peak of US gas-fired power gen cycle and impact of energy slowdown on power orders in emerging markets, delayed recovery in mining and downturn in US rail capex, and negative FX. We note that Oil & Gas higher estimates for 2018 in our model reflect the BHI acquisition, which is expected to close in mid-2017.

The bottom-up utilities capex analysis indicates that 2016 likely marked the peak of US power gen capex, which will likely weigh on GE’s growth in the Power end market over the coming years. The BofAML forecast calls for a 5% capex decline in 2017 with another 3% decline in 2018.

GE shares have not exactly participated in the big recovery. GE’s pre-earnings closing price last Thursday was $30.27, and GE shares closed at $29.55 on Friday and again on Monday. Tuesday’s initial reaction had GE shares trading down another 0.3% at $29.45 right after the opening bell.

GE’s 52-week trading range is $28.19 to $33.00.