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GE's stock continues to be under pressure in the wake of Madoff whistleblower Harry Markopolos' fraud claims.
Ormat Technologies (ORA) continues to develop geothermal projects across the globe. One of its wholly-owned unit enters into an agreement with a private investor for the McGinness Hills Phase 3 Plant.
(Bloomberg Opinion) -- Jamie Dimon says he intends to move beyond the staid maxim that corporations should act to maximize shareholder value, and he has persuaded 180 of his fellow CEOs to join him. They propose a new ethos in which corporations such as JP Morgan Chase & Co. will be accountable to all stakeholders — including not only employees, customers and shareholders, but also society at large.It certainly sounds enlightened — and if Dimon’s goal is merely to sound enlightened and thereby improve JP Morgan’s image, then his move is a smart one. If, however, he genuinely means what he says, then his proposal is misguided. Its implementation will be at best wasteful and at worst harmful to investors, workers and society.The new approach, described in a deceptively modest one-page document called “Statement on the Purpose of a Corporation” issued by the Business Roundtable, comes across as a rejection of Milton Friedman’s famous dictum that the social responsibility of business is to increase profits. So it’s useful to check what the Nobel laureate in economics actually said.In his essay, published in 1970, Friedman made no mention of “shareholder value.” His lodestar was profits (or, in the case of a non-profit corporation, the provision of the public good as laid down in its charter). Corporate managers can and have boosted share prices by engaging in accounting chicanery, obscuring tail-risks, jawboning the financial press, gaming earnings estimates and, in general, making decisions that look good in the short term but mask longer-term problems.All of these, Friedman wrote, are explicit violations of management’s social responsibility because they involve deceit on the part of someone entrusted with the savings and livelihood of others. Even white lies are violations of social responsibility.As an example, consider General Electric Co. under the leadership of CEO Jack Welch. For almost 20 years, Welch massaged the company’s earnings reports by adjusting transfers from its highly profitable GE Capital division to the parent corporation. This made it appear as if GE was steadily increasing profits at a moderate pace, when in fact profits were swinging wildly from quarter to quarter. Shareholders liked the stability and predictability of GE’s earnings and made the company the most valuable in America. The press ate it up too, turning Welch into a mini-celebrity. Employers and customers benefited as well, as the stability meant that GE could avoid rash layoffs and price increases.It was society that suffered. Welch had created the impression that U.S. heavy industry still offered solid, predictable returns if only managers had the foresight to adopt the investments in technology and leadership philosophy that he promulgated. Not only was this untrue, but pretending it was true encouraged false hope and complacency just as competition from China was challenging American manufacturing.Friedman understood that the competitive market was a better aggregator of knowledge about ideal investments, management strategies and the overall future of the economy than any single CEO could ever be. But that aggregation can only occur when market participants have accurate information on which to base prices.To his credit, Dimon — who is chairman of the Business Roundtable — has pushed back against the excessive focus on share prices at the expense of long-term profits. To the extent that he is now simply doubling down on that philosophy, his current project is both healthy and consistent with Friedman’s admonishments.But Dimon seems to have something a bit more expansive in mind. In the annual shareholder letter he published in April, he lists several chronic social ills, including an ineffective education system, a dramatic decline in labor force participation and poor federal budgeting. His diagnosis is plausible and maybe even correct. But there is no reason to believe he (or most other CEOs) has special insight into matters outside his business.In public education, for example, Dimon laments how poor inner-city schools set children up for a life of poverty. “We know what to do,” Dimon writes, and proceeds to outline an agenda of increasing vocational education and including local businesses in curriculum design. In fact, research on vocational education shows mixed results, helping students who specialize in advanced coursework in a single concentration but making it harder for them to adapt to changes in the labor market.The purpose of all this is not to criticize Dimon, whose concern appears authentic. It is only to observe that holistic thinking about economic and social systems is intuitively counter to the type of thinking often needed to excel in business. Understanding this surprising and complex divergence between market incentives and overall economic outcomes has been at the heart of economics ever since Adam Smith identified it as “the invisible hand.”Asking corporate managers to focus more on improving society and less on making profits may sound like a good strategy. But it’s a blueprint for ineffective and counterproductive public policy on the one hand, and blame-shifting and lack of accountability on the other. This is a truth Milton Friedman recognized nearly five decades ago — and one that all corporate stakeholders ignore today at their peril.To contact the author of this story: Karl W. Smith at firstname.lastname@example.orgTo contact the editor responsible for this story: Michael Newman at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Karl W. Smith is a former assistant professor of economics at the University of North Carolina's school of government and founder of the blog Modeled Behavior.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
New York sued the U.S. Environmental Protection Agency on Wednesday, accusing the agency of prematurely allowing General Electric Co to stop clearing the Hudson River of PCB contamination before the cleanup was finished. Citing the state's compelling interest in protecting the public and the environment from contaminants, New York officials are seeking to void GE's "certificate of completion" from the EPA on April 11, which excused the company from further dredging unless further studies showed more was needed. New York Governor Andrew Cuomo and Attorney General Letitia James, both Democrats, accused Republican President Donald Trump's administration of siding with "big polluters" by accepting PCB levels that constitute a known health risk and leave Hudson River fish "too toxic" to eat.
The NYS Department of Environmental Conservation says the cleanup of the PCBs GE dumped in the New York river isn't complete.
Despite what the flurry of recent headlines suggests, there are other things going on at General Electric for investors to consider besides accounting assumptions for long-term care insurance. The company’s power business, for one.
U.S. stock futures are rebounding nicely on robust earnings reports from Lowes (NYSE:LOW) and Target (NYSE:TGT).Source: Shutterstock Ahead of the bell, futures on the Dow Jones Industrial Average are up 0.77%, and S&P 500 futures are higher by 0.84%. Nasdaq-100 futures have added 0.86%.In the options pits, calm has returned, and the overall volume is sinking like a stone. Calls outpaced puts despite the down day with about 14.4 million calls versus 13.1 million puts changing hands on the session.InvestorPlace - Stock Market News, Stock Advice & Trading TipsMeanwhile, over at the CBOE, the single-session equity put/call volume ratio rallied back to 0.69, landing it in the center of its recent range. Remember, extremes in this reading are the actionable signals. When it's fiddling in the middle, it signals business as usual. The 10-day moving average continues to unwind its rally falling to 0.73.Options activity was buzzing in Target, General Electric (NYSE:GE) and Apple (NASDAQ:AAPL) yesterday.Let's take a closer look: Target (TGT)Inverted yield curves and deteriorating economic data have hampered stocks for weeks now. If you've wondered how retailers like Target have fared with all the potential headwinds, then wonder no longer. They're smashing it. This morning Target reported second-quarter earnings numbers that surpassed the Street's expectations. * The 10 Best Marijuana Stocks to Buy Now Buyers are swarming, sending TGT stock up 17% to $100. Let's look at the key metrics behind the morning's ramp to record highs. For the quarter, the company earned $1.82 per share on sales of $18.42 billion. Analysts were forecasting $1.62 EPS on $18.34 billion revenue. Same-store sales also blew through forecasts, rising by 3.4% versus expectations for 2.9%.The posture of Target's price chart was holding steady ahead of this morning's report. The powerful gap places an exclamation point on the uptrend and should set a bullish tone for the coming quarter.Earnings anticipation lit a fire under options trading. Total activity screamed to 696% of the average daily volume, with 179,908 contracts traded. Calls contributed 62% to the tally.Implied volatility was running hot at 40% ahead of this morning's report. That places it at the 77th percentile of its one-year range. Premiums were pricing in a gap of $5.36 or 6.3%, so today's 17% pole vault blew the doors off of expectations and will deliver massive profits to any traders holding long volatility trades like straddle into the number. General Electric (GE)This year's recovery in General Electric shares all but unraveled over the past two weeks, and yesterday's 3% whack shows sellers still dominate the landscape. The big news that continues to hand over the head of GE stock is last week's bearish research piece by Harry Markopolos' calling GE "a bigger fraud than Enron."Although GE did bounce back strongly after the one-day, 11% plunge, the recovery stopped short of healing all the damage, and we've since seen shares rollover. The $9 zone was a huge support zone throughout the year and now looms overhead as significant resistance. It is the spot where sellers emerged to thwart the rebound and signals we're now in a sell-the-rally environment.The sentiment is souring, the fundamentals are weak, and the technical picture looks terrible. If ever there was a toxic brew for lower prices, this is it.On the options trading front, puts outpaced calls by a modest margin. Activity crept higher to 119% of the average daily volume, with 324,254 total contracts traded. Puts added 59% to the session's sum.Implied volatility ticked up to 53% landing it at the 49th percentile of its one-year range. Premiums are baking in daily moves of 28 cents or 3.3%. Apple (AAPL)Last month's earnings report introduced volatility to Apple shares, and the outsized swings continue to this day. Fortunately, the past two weeks of gains have returned AAPL stock to the scene of its earnings gap. Sellers aren't ceding ground without a fight, however. The last two sessions have seen intraday bearish reversals creating a pair of topping tails that reflect a battle at resistance. * 7 Unusual, Growth-Oriented REITs to Buy for Your Portfolio This morning's 1% gap higher will test sellers' resolve once more. But with the 50-day and 20-day moving averages both pointing higher, I suspect it's only a matter of time before we visit the next resistance zone at $220.Even though the news was light for AAPL yesterday, the options trading was high enough to land Apple on the leaderboard. Traders favored calls over puts despite the late-day selloff. Total activity only added to 77% of the average daily volume, with 426,467 contracts traded. 61% of the trading came from call options.Implied volatility inched higher on the day to 28%, pushing it to the 31st percentile of its one-year range. Premiums are now pricing in daily moves of $3.76 or 1.8%, so plan accordingly.As of this writing, Tyler Craig didn't hold a position in any of the aforementioned securities. Check out his recently released Bear Market Survival Guide to learn how to defend your portfolio against market volatility. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Marijuana Stocks to Ride High on the Farm Bill * 8 Biotech Stocks to Watch After the Q2 Earnings Season * 7 Unusual, Growth-Oriented REITs to Buy for Your Portfolio The post Wednesday's Vital Data: Target, General Electric and Apple appeared first on InvestorPlace.
General Electric (NASDAQ:GE) has been on a bumpy ride over the past week. Last Thursday, the company's shares had their worst day since the 2008 financial crisis hit. General Electric stock fell 11% after forensic accountant Harry Markopolos released a 175-page report accusing the company of accounting fraud.Source: JPstock / Shutterstock.com However, on Friday, GE stock rebounded slightly after management defended its accounting practices in a series of statements. Plus, CEO Larry Culp bought $2 million of the equity. This action went a long way to soothe investors that were rattled by the allegations.But this is just the latest in a series of missteps that has impacted the GE stock price. The hype over the Markopolos report may pass. However, the company still has serious problems it needs to address going forward.InvestorPlace - Stock Market News, Stock Advice & Trading Tips Details on the Report from MarkopolosHarry Markopolos is best-known for accurately spotting the Bernie Madoff Ponzi scheme. In his report, Markopolos said General Electric is hiding serious financial problems that will cause it to go bankrupt. * 10 Undervalued Stocks With Breakout Potential Specifically, GE understated liabilities in its insurance business and misrepresented its financial dealings. Its accounting fraud is "bigger than Enron and WorldCom combined."If it sounds sensational and over the top, that's because it is. The Markopolos report is short on any real evidence and full of inaccuracies. Analysts from Goldman Sachs, Citigroup, and William Blair have all criticized the report.Plus, Markopolos is part of a hedge fund that stands to benefit financially from a declining GE stock price. This immediately hinders his credibility. But regardless of what happens with the report, it seems unlikely that General Electric stock is turning around anytime soon. Reasons to Hold Off on General Electric StockIn spite of the company's restructuring efforts, General Electric stock is down nearly 30% from a year earlier. It's also down 85% from its all-time high in 2001. One of the biggest problems GE needs to contend with is its heavy debt load.The company is carrying more than $100 billion in debt and is running out of ways to reduce this figure. It already sold off its energy services, part of its healthcare business, and other assets. Not to mention, the company hasn't earned any net income over the past couple years. Further, its free cash flow has been negative for a long time now.A number of analysts have defended the company, and many point to their faith in CEO Larry Culp as the reason why. And it's true that Culp has done a lot to turn General Electric around. But these problems are bigger than any one CEO.The company may not be guilty of fraud. But right now, it isn't worth investing in either. If a General Electric turnaround is ever going to happen, it's going to take a long time. And the company's shareholders will be negatively affected in the meantime. As of this writing, Jamie Johnson did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Cheap Dividend Stocks to Load Up On * The 10 Biggest Losers from Q2 Earnings * 5 Dependable Dividend Stocks to Buy The post Now Isnat the Time to Invest in General Electric Stock appeared first on InvestorPlace.
The heads of nearly 200 U.S. companies said Monday they are committing to a move away from the idea that the main purpose of a company is to maximize shareholder value, marking a break with a long-held conviction.
Things have not been great for General Electric (NYSE:GE) and a negative report by Harry Markopolos was the last thing GE stock needed.Source: JPstock / Shutterstock.com When I last wrote on GE, I had opined that investors should remain on the sidelines. I also opined that GE should spin-off its aviation segment to create further value.I maintain my "remain on sidelines" view on GE stock even after a sharp decline of 20% in August, recent developments only have solidified my position.InvestorPlace - Stock Market News, Stock Advice & Trading Tips Harry Markopolos Versus General ElectricMarkopolos is a well-known whistleblower related to exposing Bernie Madoff's Ponzi scheme.In a detailed report, Markopolos claimed that GE is under-reporting $38 billion in losses. That's a big accusation considering the company's current market capitalization of $77 billion. * 10 Undervalued Stocks With Breakout Potential However, GE was quick to respond to the allegations with the company calling them "meritless." In an interview with CNBC, Leslie Seidman, an independent director, commented that the claims were "misleading, inaccurate and inflammatory."It is worth noting that Leslie was a former chairman of financial accounting standards and according to her view, the report by Markopolos is "full of opinions."However, there is an important point mentioned by Leslie in the interview that backs my view of staying on the sidelines.GE will go through an annual loss recognition test in the third quarter. Further, GE will also complete the annual statutory cash flow testing in the first quarter of 2020. According to GE press release -It is the statutory cash flow testing, not GAAP accounting, that determines the funding requirements for all insurance companies.I believe that the market will wait for liquidity cues from these tests and the stock can potentially remain sideways. Further clarity on the liquidity position or additional liquidation requirement for LTC insurance can dictate the stock direction.Additionally, GE has planned to monetize assets and the markets will wait for announcement on that front for additional liquidity cushion.Therefore, even if the claims by Mr. Markopolos are baseless, General Electric stock is unlikely to witness any bullish momentum as markets are in a "wait and watch" mode. Economic Headwinds Will Keep GE Stock DepressedThe Federal Reserve has already cut interest rates for the first time since the end of 2015. This is clearly an indication of the fact that economic growth is decelerating.There is a fear that a possible recession will be "long than deep." If this holds true, General Electric is likely to face challenging times.It is also a matter of concern from the perspective of asset monetization. With General Electric looking to ramp-up cash position, a slowdown or recession will make asset sale challenging.To add to the woes, General Electric CEO has already stated in March that free cash flow from the industrial and power unit will remain negative in 2019. Even if this factor is already discounted in the stock, it is a strong reason to avoid GE.Moreover, the power segment is unlikely to see positive free cash flows for the coming years and offsets potential positives from other segments. This is another reason why it makes sense to spin-off robust cash flow divisions to unlock shareholder value.Spin-offs will also make room for detailed reporting of segment or business segments. This is something investors will be looking for, amidst fraud allegations. Final Words on GE StockGeneral Electric still has a long road ahead in terms of restructuring, asset sale and deleveraging. Economic headwinds will make the path challenging and possibly delay asset monetization. Further, the power business remains a drag and impacts the consolidated free cash flows.The coming quarters will be important as GE releases the awaited reports on the annual loss recognition test and annual statutory cash flow testing.Overall, GE stock has a mountain to climb and I expect sideways movement amidst volatility than any sharp upside in the coming quarters.In-sync with this view, investors should stay on the sidelines and wait for further clarity on the liquidity profile and business restructuring developments.As of this writing, Faisal Humayun did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Cheap Dividend Stocks to Load Up On * The 10 Biggest Losers from Q2 Earnings * 5 Dependable Dividend Stocks to Buy The post Whether or Not You Believe the Fraud Allegations, Avoid GE Stock appeared first on InvestorPlace.
The U.S. State Department has approved a possible $8 billion sale of F-16 fighter jets to Taiwan, the Defense Security Cooperation Agency said on Tuesday in an official notification to Congress. The potential deal is for 66 aircraft, 75 General Electric Co engines, as well as other systems, the agency said in a statement, adding it served the interests of the United States and would help Taiwan maintain a credible defense. China has already denounced the widely discussed sale, one of the biggest yet by the United States to Taiwan, which Beijing considers a wayward province.
Fitch Ratings’ annual report on long-term care insurers ranked GE second on its list of the 16 riskiest LTC insurers. GE stock fell 3.18% on the news.
The bullish start to the week fizzled out on Tuesday, despite mostly-optimistic chatter. Credit Suisse's "recession dashboard" says there's not one in sight. "Key signals such as labor and credit trends remain quite healthy," explains Credit Suisse chief U.S. equity strategist Jonathan Golub.And, while he laments it, fund manager Kyle Bass made the case that central banks are going to continue doing anything and everything they can to keep the global economy propped up. JPMorgan's global head of quantitative and derivatives strategy Marko Kolanovic even went as far as saying last week's temporary inversion of the yield curve wasn't the cause for worry it might normally be.InvestorPlace - Stock Market News, Stock Advice & Trading TipsDisruption in Europe may have been the crux of the weakness. The United Kingdom may postpone the selection of the Bank of England's next governor until after Brexit, though Brexit itself remains up in the air. In Italy, Prime Minister Giuseppe Conte announced his resignation, simultaneously criticizing Deputy Prime Minister Matteo Salvini for calling for the no-confidence vote that led to his exit.Both cast a cloud of uncertainty over Europe, which was already struggling to maintain economic growth. * 10 Undervalued Stocks With Breakout Potential All told, the S&P 500 snapped a three-day win streak with its 0.53% setback on Tuesday. The Dow Jones Industrial Average wasn't quite as damaged, falling 0.37%, while the NASDAQ Composite ended the day 0.45% lower. Top News in the Stock Market TodayIt had little impact on shares, but it's a developing story that could matter more in the future. That is, on Tuesday, a string of personnel exits from the healthcare arm being developed by Apple (NASDAQ:AAPL) was thrust into the spotlight. The report named six key people who'd left the company in recent months, reportedly frustrated about the direction Apple's health business was moving. Some employees interviewed anonymously suggested tensions had been mounting for some time. The disruption calls into question how much traction Apple's health initiatives will garner in the foreseeable future.Walt Disney Company (NYSE:DIS) joined General Electric (NYSE:GE) as a recent accusee of misleading accounting, though in this case, the red flag is being waved by a former insider. Sandra Kuba, formerly a senior financial analyst with Disney that was terminated in 2017, suggested the entertainment giant had habitually reported more revenue than it had actually generated. Kuba went as far as to formally inform the Securities and Exchange Commission.Walt Disney denied the accusation, and given the small gain DIS stock mustered on an otherwise bearish day, investors aren't concerned.Investors are concerned about Sarepta Therapeutics (NASDAQ:SRPT), however, after the Food and Drug Administration responded to its most recent drug approval request with less than open arms. The FDA sent a so-called Complete Response Letter to Sarepta regarding concerns and questions it had about its Duchenne muscular dystrophy drug that's been in development for years.The letter is not a rejection, but it does suggest the FDA is so far unconvinced that the drug is worth greenlighting. SRPT stock fell more than 15% on the news. Big MoversDespite its clear capacity to put and keep itself in the spotlight, "meatless" meat company Beyond Meat (NASDAQ:BYND) hasn't impressed the analyst community. Until Tuesday, no analyst was willing to call the stock a "Buy" … that is, until today. JPMorgan analyst Ken Goldman upgraded BYND stock to that rating, explaining "We are encouraged that velocity -- sales per distribution point -- has been the primary driver of recent acceleration, as it suggests the products are catching on with consumers."The call pushed Beyond Meat shares up by more than 6%.It's not much of a household name, but for households that own a piece of electronics manufacturer Cemtrex (NASDAQ:CETX), that stake is worth 36% more today. Shares jumped nearly 30% in regular-hours action on Tuesday following an impressive second quarter report that saw an additional 6% advance in after-hours action. The promise of real profits within the next few quarters fanned the bullish flames.Not every big mover was necessarily a winner though. Madison Square Garden (NYSE:MSG) tumbled nearly 9% after the company's second-quarter bottom line fell short of estimates. Its new project in Las Vegas is proving costly but not fruitful.As of the time of this writing, James Brumley did not hold a position in any of the aforementioned securities. To learn more about James, visit his site at jamesbrumley.com, or follow him on twitter at @jbrumley. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Cheap Dividend Stocks to Load Up On * The 10 Biggest Losers from Q2 Earnings * 5 Dependable Dividend Stocks to Buy The post Stock Market Today: Beyond Meat Makes a Friend on Wall Street appeared first on InvestorPlace.
Betting against General Electric Co stock has increased in the last week as the stock has fallen following a report by fraud investigator Harry Markopolos that questioned the conglomerate's accounting, financial analytics firm S3 Partners said on Tuesday. Short sales, or bets that GE's stock price will fall, rose 13.5% to $14.3 million in the last week and 20.7% to $20.6 million in the last month, Ihor Dusaniwsky, managing director of predictive analytics at New York-based S3 Partners, told Reuters. GE stock closed down 3.3% at $8.38 on Tuesday, and is down about 7 percent since Markopolos's report came out last Thursday.
U.S. stocks started the week with a bang on Monday amid improved forecasts regarding the trade war with China and news of a potential government stimulus. As confidence has returned, investors are searching for stocks that will emerge as the winners from the market boost. New York brokerage firm, Wolfe Research, points to General Electric (GE) and J.P. Morgan (JPM) as two potential winners who can outperform the market over the next 12 months. Let's take a closer look: General Electric (GE)Despite recent turbulence, one top analyst argues that the bears should take note of all of the progress GE has made in the past six months.GE has placed a strong focus on meeting its balance sheet goals. Not only has the company fully liquidated its Wabtec stake, but it’s also likely that GE will finalize the sales of its Bio-Pharma and Baker Hughes segments in the next twelve months. Wolfe Research's Nigel Coe, a four-star analyst according to TipRanks, believes that GE can make a significant dent in its $20 billion pension deficit, retire its $6 billion in preferred stock and $10 billion of fund insurance obligations, all with the $32 billion of surplus capital that is being realized.As a result, Coe reiterated his Buy rating on GE stock, with a $14.00 price target, which implies about 67% upside from current levels. (To watch Coe's track record, click here)The stabilization of the worldwide power market has also had an effect on GE. According to industry data firm McCoy, the power market could reach about 40GW of capacity orders this year, compared to expectations of sub-30GW. This has allowed the company to achieve quarter-over-quarter and year-over-year growth in its power backlog as well as HDGT backlog build. This means that it’s likely GE will be able to deliver more than the 40 to 45 gas turbines designated for 2019 and 2020.Furthermore, some investors have expressed concerns regarding CFO Jamie Miller’s departure as well as the $1.2 billion of working capital pressure from the grounding of the 737 MAX jets. However, Coe argues that these risks don’t change GE’s long-term growth narrative.Coe concluded: “While we acknowledge a higher pension deficit and slightly more conservative long-term GE Capital funding requirements, risk/reward remains skewed to the upside and the stock is now re-energized as a fresh money idea.”All in all, this troubled industrial giant certainly has the Street divided. Based on 9 analysts polled by TipRanks in the last 3 months, 3 rate a Buy on GE stock, 3 suggest Hold, while 3 recommend Sell. The 12-month average price target stands at $9.42, marking about 12% upside from where the stock is currently trading. (See GE’s price targets and analyst ratings on TipRanks) J.P. Morgan (JPM)Even with the possibility of interest rates being cut further, Wolfe Research is still betting on this banking stock.According to five-star analyst, Steven Chubak, JPM should be able to offset negative impacts of low interest rates and the trade war based on its volume growth.As a result, Chubak reiterated a Buy rating on JPM, with a price tag of $120, suggesting the stock can rise just over 10% from current levels.“We believe the impact from lower rates should be largely offset by volume growth as JPM should continue to benefit from strong organic growth in IEA, which has been a significant driver of net interest income expansion in recent years,” Chubak explained.Another threat to JPM is the possibility that the economy could enter into a recession. That being said, management stated that they believe recession fears are overblown based on the current low unemployment rate, healthy housing market and high consumer confidence.Even so, the company has made itself more defensible as it has placed a significant focus on growing the payments segment of the business. JPM recently launched its cryptocurrency, JPM Coin, as well as expanded Chase Paymentech or its payment processing service. While it does face intense competition, Chubak points out that many of these competitors will likely use their platforms to serve banks as opposed to working against banks.Chubak concluded, “We argue that JPM’s best-in-class organic growth, strong management team, and better performance track record in periods of stress justify a higher late-cycle multiple. We believe that JPM has room for further upside on returns as newer growth initiatives within Payments and Retail Brokerage scale.”The rest of Wall Street largely buys into what this banking giant has to offer, as TipRanks analytics reveal JPM as a Moderate Buy. Out of 9 analysts polled in the last 3 months, 6 are bullish on J.P. Morgan stock while 3 remain neutral. With a return potential of nearly 14%, the stock’s consensus target price stands at $122.11. (See JPM's price targets and analyst ratings on TipRanks)
The furor over GE's accounting underscores how companies are struggling to price for the future at a time when people are living longer.
The center, a partnership with GE Healthcare, features 20 artificial intelligence apps, 38 large screens with some being touch screens that help track and monitor rooms and a patient's progress.