UBS downgraded on Monday General Electric Company (GE) from “Buy” to “Neutral”, while advising market players to “take a breather after recent stock outperformance.”
The brokerage also revised down its 12-month price target on the stock from $13.00 to $11.50.
General Electric shares closed lower for the seventh time in the past thirteen trading sessions in New York on Monday. It has also been the steepest daily loss since July 8th. The stock went down 0.96% ($0.10) to $10.27, after touching an intraday low at $10.20 and an intraday high at $10.34.
Shares of General Electric Company have risen 35.67% so far in 2019 compared with a 20.24% gain for the benchmark index, S&P 500 (SPX).
In 2018, General Electric’s stock went down 56.62%, thus, it underperformed the S&P 500, which registered a 6.24% loss.
“A notable decline in interest rates and ongoing power market weakness drive our more balanced valuation upside/downside,” UBS analyst Damian Karas wrote in a note to clients, cited by CNBC.
The analyst noted that the UBS team could “start to look increasingly at the multi-year turnaround/transformation.”
Karas also revised down his estimate for full-year 2019 industrial free cash flow to -$1.5 billion.
Steve Winoker, former UBS analyst, had assigned the “Buy” rating on GEs stock last October. In January 2019, Winoker was appointed as Vice President of investor relations at General Electric.
Analyst stock price forecast and recommendation
According to CNN Money, the 15 analysts, offering 12-month forecasts regarding General Electric’s stock price, have a median target of $11.50, with a high estimate of $21.00 and a low estimate of $5.00. The median estimate represents an 11.98% upside compared to the closing price of $10.27 on July 15th.
The same media also reported that at least 9 out of 19 surveyed investment analysts had rated General Electric’s stock as “Buy”, while 8 – as “Hold”. On the other hand, 2 analysts had recommended selling the stock.