General Electric Co. (NYSE: GE) is set to report its most recent quarterly results before the markets open on Wednesday. The consensus forecast calls for $0.12 in EPS and $28.52 billion in revenue for the second quarter. In the same period of last year, GE posted $0.19 in EPS and $30.1 billion in revenue.
GE has seen its share of volatility in recent years. After peaking before the Great Recession, even during the great recovery this conglomerate never came close to recapturing its old highs. Its recent trends, during and after the Jeff Immelt era, have been much less than positive.
The research team at UBS has said it is time to take a breather on GE. The firm downgraded its rating on the conglomerate to Neutral from Buy. Analyst Damian Karas also lowered his target to $11.50 from $13.00 in Monday’s report.
Investors sometimes ignore analyst downgrades that are based on valuation or relative performance metrics. Monday’s report sounds cautious on the surface, but there may be a bright side in the note:
We are downgrading GE to Neutral, as a notable decline in interest rates and ongoing power market weakness drive our more balanced valuation upside/downside being 1:1. After the stock’s circa-20% relative outperformance year-to-date and the alleviation of bottomless cash pit scenarios dominating the narrative, we believe that we can start to look increasingly at the multi-year turnaround/transformation.
Overall, GE has outperformed the broad markets in 2019, with its stock up about 43% year to date. In the past 52 weeks, the stock is actually down closer to 18%.
A few other analysts also weighed in on GE ahead of the results:
- William Blair has a Buy rating.
- Citigroup has a Buy rating with a $14 price target.
- Deutsche Bank has a Hold rating and a $10 price target.
- Cowen’s Hold rating comes with an $8 price target.
- JPMorgan rates it Underweight with a $5 price target.
Shares of GE traded at $10.36 on Tuesday, in a 52-week range of $6.40 to $13.25. The consensus price target is $10.78.