General Electric Co. (NYSE: GE) share price dropped on Friday and came close to their lowest price in nearly 10 years. The GE stock price fell as Deutsche Bank analyst Nicole DeBlase lowered the company’s price target after reviewing GE’s cash flow forecast.
To make matters worse, the WSJ had previously reported that former GE employees had been interviewed by federal investigators regarding accounting problems within the company. These problems were within GE’s legacy insurance business, the investigation uncovered poor risk reporting and a $6.4 billion charge in Q4.
GE stock price fell by 6.6 percent on Friday’s afternoon trading period, causing it to near low levels not seen since March, 2009. Trading volume hiked, making GE stock the most actively traded company on a U.S exchange.
Since posting a poor Q3 report on October 30, GE stock hasn’t been able to recover from the selloffs that incurred. Thursday saw the stock make gains for two trading periods consecutively, the first time in over a month. After the gains were made on Thursday, Friday saw GE stock price fall once again, reversing the gains made on the previous two trading periods.
Nicole DeBlase slashed her GE stock price target by 6% from today’s price. DeBlase had a previous forecast of $11. DeBlase said that after taking time to understand everything presented at the GE post-earnings conference call she cut the price target.
GE Stock Price Forecast
GE’s dividend had been cut in half last year, with the new CEO Lawrence Culp cutting the dividend even further last month. This is not good for investor confidence and makes the stock a less attractive buy for income-focused investors. We expect GE share price to fall even further unless the company can show some sign of improvement in their Q1 earnings call.
We have seen the GE share price fall by 57 percent year-on-year, putting General Electrics as the worst performing company in the SPDR ETF.
On the upside, DeBlase does not see GE facing a liquidity crisis. With the company’s Power business and improved margins, not all hope is to be lost with the company. The company is also likely to benefit from U.S economic strength and debt reduction targets.
It is difficult to forecast future selloffs for GE as more analyst price cuts could send the price of GE stock into further turmoil.
Our analyst gives GE stock forecast of $11 over the next 12-months.
Our analyst gives GE stock a “HOLD” rating.
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