Goldman: Don't Expect A General Electric Company (GE) Recovery In 2018

NYSE: GE | General Electric Company Common Stock News, Ratings, and Charts

GE – Goldman Sachs remains cautious on GE through at least the end of next year.

General Electric Company (NYSE:GE) has spent most of this year simply trying to stop the bleeding.

The former industrial superpower has been decimated amid massive cash flow issues, rising pension obligations, and underperformance within its energy segment. As a result, it’s slashed its dividend in half, jettisoned several business units, and eliminated tens of thousands of jobs.

Despite the bold restructuring moves, analysts at Goldman Sachs remain cautious on the stock through next year. The firm reiterated its Neutral rating on GE recently, preferring to stay on the sidelines despite some evidence that GE’s turnaround plan is working.

Analyst Joe Ritchie continues to look at 2018 as a transitional year for GE, as investors wait and see whether the company can reach its restructuring goals. “On cost-outs, GE is targeting $3B-plus of actions in 2017-18 to generate $2B-plus of net benefits, and we believe it will be critical for GE to demonstrate core margin expansion,” he wrote in a note to clients last week.

It’s still up in the air whether GE’s Power unit can follow through on its “ability to offset end market weakness with cost-outs and show 60% free cash flow conversion in 2018 (vs. negative in 2017) will be a key measure in increasing confidence [and] believability that fundamentals can turn around by 2019-20,” Ritchie said.

In other words, investors are probably better off taking a wait-and-see approach in 2018.

General Electric Company shares closed at $17.71 on Friday, flat on the day. Year-to-date, GE has declined -42.46%, versus a 20.47% rise in the benchmark S&P 500 index during the same period.

GE currently has a POWR Rating of D (Sell), and is ranked #31 of 34 stocks in the Industrial – Manufacturing category.

GE at a Glance

GE Current POWR Rating™
Overall POWR Rating™
GE Current Price $8.98 2.86%
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GE Price Reaction

The day of this event (Dec. 10, 2017)
GE Closing Price$17.05 0.34%
GE Volume60,232,396
30.56% from avg
Leading up to this event
GE 1-mo return13.57%
After this event
GE 1-day return1.12%
GE 3-day return0.40%
GE 5-day return0.28%

GE Price Chart

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