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GE: You Get What You Deserve?

It's been a banner year for some industrial stocks. Boeing (BA) has soared more than 70% in 2017, while Caterpillar (CAT) has climbed almost 50%, and Deere (DE), which released top-notch earnings today, has jumped 40%. In a note released yesterday, Deutsche Bank's John Inch contends it's bad enough that GE deserves to trade at a big discount: Overall, we believe GE should trade at a valuation discount given still aggressive accounting, cash flow pressures including potential negative US tax reform impact, rising debt pressures including more debt downgrades ahead, “black box” low taxes, future divestiture dilution, the potential for additional lawsuits and an overall profit outlook that appears to be “L” shaped (flattish).