General Electric 'Moving In The Right Direction,' But Tigress Not Buyers Right Now

It's been a rough year for General Electric Company GE, highlighted by a CEO change and a drastic reduction to its dividend payout. While the company has taken steps it believes can turn itself around, not all of Wall Street is convinced the stock is a buy at its depressed levels.

The Analyst

Tigress Financial Partners' Ivan Feinseth maintains a Neutral rating on GE's stock.

The Thesis

GE's management team communicated a game-plan of transforming its three strongest business franchises, including aviation, healthcare services, and power generation, Feinseth said in a note. The company will look to divest other business lines and allocate capital to creating future shareholder returns. Management's main message to investors is that it is adding value to its core business lines and the large reduction to its dividend is a "bold step in the company's turnaround."

Nevertheless, 2018 will prove to be a transition year for the GE as management's strategy is long-term in nature with minimal if any focus on near-term share price returns, the analyst said. GE's stock has likely found a bottom near Thursday's multi-year low of $17.25 and there is "little downside from current levels."

It will take some time for the company to show investors positive Business Performance trends and investors may want to consider staying on the sidelines until various performance metrics improve or new catalysts emerge that could generate shareholder value creation.

Price Action

Shares of GE are down 45 percent since the start of 2017.

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