JPMorgan Chase analysts are still not convinced on GE’s (GE) turnaround plan, with the bank publishing a note Tuesday in which it slashed its share price target to $11 from $14.
The note, entitled, “Breaking The Buck: How $1 Becomes $0.50 and Why the Great Reset is Not Quite Reset," as released by Seeking Alpha, says the company’s nominalized free cash flow per share should be around $0.50, half of the Street consensus of $1.
Even worse, JPM reminded reminded readers that the $0.50 may not be the bottom point with the industrial conglomerate’s aviation business well away from the bottom. Analysts also pointed out that healthcare is not that cyclical. Also, the $1 estimate doesn't account for continued restructuring costs or asset sales that will go to the company's balance sheet instead of its shareholders.
The lowered price target to $11 from $14 implies more than another 20% downside for GE’s share price.