General Electric Company GE 0.48% investors have been waiting patiently for more than 15 years for the former bellwether of the U.S. economy to get its act together. So far, that patience hasn’t been rewarded.
Not only is GE stock down more than 17 percent since 2002 during one of the strongest bull markets in history, JPMorgan said this week that Wall Street’s earnings expectations for GE in 2017 and 2018 are still way too high.
At this point, it seems as if GE can’t seem to do anything to get into the good graces of the market. JPMorgan’s negative commentary this week comes after Deutsche Bank slapped a Sell rating on the stock in May and said asset sales are no substitute for a healthy business model.
Shareholders calling for a change in leadership had their wish granted back in June when GE announced the departure of Jeff Immelt. The stock initially traded higher by more than 3.5 percent on the day of the news to around the $29 level. Roughly three months later, GE stock is trading at $24, 14.6 percent below where it was prior to the announcement.
GE has met or beat Wall Street earnings expectations for the past eight quarters. Yet fears over where present and future earnings are coming from have stolen the headlines.
GE has even done its very best to attract yield investors by paying out a generous 4.0 percent dividend yield. Unfortunately, both JPMorgan and Deutsche Bank now question whether or not that dividend is sustainable if GE can’t find some legitimate source of long-term earnings growth. GE’s payout ratio now stands…
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