JP Morgan Downgrades $GE — Shares Dive Lower

What a wondrous morning. The sun is casting a long shadow on the lawn and the temperature is a moderate and humid 60 degrees. For GE, however, today sucks — as long term fan-boy of the company downgraded the stock and fixed a $5 price target on said shares.

“We believe many investors are underestimating the severity of the challenges and underlying risks at GE, while overestimating the value of small positives, and with a 38% move in the stock year to date, and >50% cuts to forward fundamental FCF (free cash flow) anchors, we are cutting our [price target] and moving to” underweight, wrote Tusa in a note to clients.

Tusa continued:

“The driver of the downgrade is our view that the Street is significantly over projecting the bounce in FCF in the coming years, off levels that we calculate at zero currently, as Power/Renewables remains weak, GECS (GE Capital Services) will likely consume material cash for the foreseeable future, Aviation fundamentals, as per underlying FCF, are weaker than meet the eye, while lingering sector high leverage including entitlements leaves the company vulnerable to liquidity issues in the event of a recession, for which a potentially dilutive sale of the rest of Healthcare may be needed.”

GE is the proverbial canary in the coal mine — the Lehman of this generation — the quintessential fuckery to end all fuckeries. Look for the stock to death-spiral over the next 12 months, leading the overall market into a state of abject misery and depression.

GE is lower by 5% this morning.

Happy Monday!