General Electric Shares Keep Falling, On Track for Fourth Straight Session of Declines
November 12 2018 - 11:49AM
Dow Jones News
By Saumya Vaishampayan
General Electric Co. shares tumbled further Monday as investors
continued to question the viability of the once-storied industrial
conglomerate.
Shares dropped 6.1% to $8.06, on track for their fourth straight
day of declines. The stock has slumped nearly 30% since the company
unveiled plans two weeks ago to cut its dividend to a penny a
share.
The latest slide comes after Chief Executive Larry Culp said the
company's power business is "getting close" to a bottom in an
interview with CNBC on Monday, indicating that woes for the unit
could continue. That business has been plagued by issues like
dropping global demand and turbine blade failures, which have
contributed to the stock's swoon in recent months.
GE shares also slumped Friday after analysts at JPMorgan Chase
& Co. slashed their price target on the stock to $6 a share, a
move fueled by the company's high leverage and limited available
cash, disappointing results and its decision to cut its dividend.
The company last month also disclosed it was the subject of a
criminal accounting probe.
With the latest declines, the stock is now down by more than 50%
so far this year and is trading around levels last hit during the
financial crisis. It's the latest sign of gloom for GE, which was
once the most valuable American company in the early 2000s and an
original member of the Dow Jones Industrial Average. GE was removed
from the 30-stock Dow industrials in June.
Kate Moore, chief equity strategist at BlackRock, said GE's
stock slump doesn't indicate "something sinister happening in
industrial conglomerates or the broader economy."
"Investors are certainly watching price movement in a lot of
these bellwether stocks, but I would suggest that there's unlikely
to be a huge sentiment contagion because this is a specific
security issue," she added.
--Corrie Driebusch contributed to this article.
Write to Saumya Vaishampayan at saumya.vaishampayan@wsj.com
(END) Dow Jones Newswires
November 12, 2018 11:34 ET (16:34 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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