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WSJ: JPMorgan Warns General Electric Shares Could Plunge to $6

general electric factory with logo and company name in white lettering on red brick facade
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Friday, 09 November 2018 02:28 PM

General Electric Co.’s shares plunged Friday after JPMorgan Chase & Co. analysts sharply cut their price target on the stock.

The price-target cut highlighted the deepening questions on Wall Street about the true worth of an industrial conglomerate that just two decades ago was the most-valuable U.S. stock, The Wall Street Journal reported.

Shares (GE) declined 9% to $8.28, extending their losses for the year to more than 50%, WSJ.com reported.

The analysts, who cut their price target to $6 a share, shared a few reasons for their dimmed view of the stock: GE’s high leverage and little cash on hand, its disappointing third-quarter results and its slashed dividend, the Journal said. 

The stock price fell below $9 for the first time since March 2009, during the throes of the financial crisis, Reuters explained.

GE spokeswoman Jennifer Erickson said in a statement: “GE is a fundamentally strong company with a sound liquidity position. We are taking aggressive action to strengthen our balance sheet through accelerated deleveraging and position our businesses for success.”

Meanwhile, Forbes.com recently reported many General Electric (GE) retirees depend on the company for their pension and the stock for their portfolio. The stock woes have forced the retirees to contemplate selling the stock.

"The key decision you can control is how much of your GE stock you hold onto?" Forbes.com Contributor Ken Kam asked.

"The underfunded pension fund may worry you, but there is nothing you can do about it. In the worse case scenario, the Pension Benefit Guarantee Corp. (PBGC), a government agency, will take over GE's pension obligations. Check out this page to see what your maximum benefit might be if the PBGC steps in," Kam explained.

"The main reason to sell your GE stock is so that if the company does not turn things around, you are not put in a position of having your pension benefits reduced at the same time as your portfolio takes such a big hit that you can't recover from it," Kam advised retirees.

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Analysts cut their price target on the former Dow component to $6 a share, sparking another big selloff
jpmorgan, general, electric, shares, ge, stock
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2018-28-09
Friday, 09 November 2018 02:28 PM
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