During a week that saw the Dow Jones industrial average lose drop the best part of 1,000 points, it’s no surprise that General Electric Co. (NYSE: GE) stock also took a few hits. Only three Dow stocks — all tech stocks — dodged the carnage. GE shares fell by about 2.6% in the week, but that placed the company roughly in the middle of the week’s losers.
GE shares have lost 19% of their value to date in 2018 and have fallen about 53% during the past 12 months. The second-worst Dow stock so far this year is McDonald’s Corp. (NYSE: MCD), down 13.9%. That is followed by Procter & Gamble Co. (NYSE: PG) down 13.5%; Chevron Corp. (NYSE: CVX), down about 10.8%; and Walmart Inc. (NYSE: WMT), down 10.1%.
The Dow dropped more than 800 points over the course of the week and closed Friday at 24,538.06, a loss of about 3.2%.
GE kicked off the week with an announcement that it is reducing the size of its board from 18 to 12 and nominating three new directors to go with nine returnees. One analyst called this the first positive development for the company in over a year. GE had to start somewhere.
The rest of the news was not so good. GE cut its 2016 and 2017 earnings per share by 13 cents and 16 cents, respectively, owing to a change in accounting standards. The accounting change also cast doubt on GE’s prospects of meeting its guidance for 2018. The company lowered its earnings outlook to the low end of its previously announced range ($1.00 per share).
To add insult to injury, the U.S. Securities and Exchange Commission is looking into GE’s revenue recognition practices following the disastrous $6.2 billion charge related to the company’s insurance business.
GE shares closed at $14.12 on Friday, in a 52-week range of $13.95 to $30.54. The 12-month consensus price target is $18.36, down $0.21 week over week, with the low target at $13 and the high target at $36.