As previously reported, Morgan Stanley analyst Nigel Coe downgraded General Electric to Underweight from Equal Weight and cut his price target on the stock to $22 from $25, citing his substantial cut to earnings expectations.
Coe reduced his 2017 headline EPS estimate to $1.06 from $1.40 and also sees a higher probability of a dividend cut to about 70 cents than he thinks is currently factored into the stock price. However, the analyst noted that his downgrade “is not in any way a reflection on new management,” stating that he thinks new CEO John Flannery is the right man for the job, but the scale of the challenges he faces are “greater than even we had imagined.”
GE shares, which were also downgraded to Neutral from Buy at UBS this morning, were down 1% to $23.59 in pre-market trading.
