Wall Street’s Top Analyst Cautious on General Electric Company (GE) Ahead of FQ3:16 Results

Oppenheimer top analyst Christopher Glynn delves into General Electric Company (NYSE:GE) ahead of the company’s third-quarter print to be posted October 21st, remaining sidelined amid foreign exchange headwinds, higher restructuring, and higher tax rates.

As such, the analyst reiterates a Perform rating on shares of GE without listing a price target. Glynn reduces third-quarter estimates from $0.33 to $0.30 and maintains fourth-quarter projections of $0.49, with EPS 2016 expectations cut from $1.53 to $1.50. Glynn’s estimates for 2017 and 2018 remain the same.

In addition, Glynn notes GE Power “may skew modestly greater to 4Q, and accelerating investment in the ‘Current’ initiative likely impacts profits at lighting near term.”

The analyst believes, “We expect incremental corporate restructuring in 3Q on re-tooling lighting footprint for transition to LED-centric portfolio. At the segment level, investment in positioning the lighting business toward energy management solutions/service (Current) drives our expectation for modest segment losses near term vs. prior expectation for modest profit.”

Ultimately, for Glynn, “Aviation and Power simplification, and overall elevated 2016 restructuring, remain keys to longer term expectations.” In the near-term, Glyn remains cautious on the industrial giant’s “state of profitability” for O&G, Lighting, Energy, underscoring “awkward” second half of 2017 comparisons when looking at the company’s guidance for the second half of 2016 for GE Power.

As usual, we like to include the analyst’s track record when reporting on new analyst notes to give a perspective on the effect it has on stock performance. According to TipRanks, top five-star analyst Christopher Glynn has achieved the highest ranking of #1 out of 4,193 analysts. Glyn upholds a 75% success rate and garners 15.6% in his annual returns. When recommending GE, Glynn gains 16.3% in average profits on the stock.

TipRanks analytics indicate GE as a Hold. Based on 10 analysts polled in the last 3 months, 40% rate a Buy on GE, 40% maintain a Hold, while 20% issue a Sell. The 12-month price target stands at $31.71, marking a 7% upside from where the shares last closed.

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