Summary
- General Electric has widely underperformed its industrial peers in the sector over the last year.
- GE is driving a hard restructuring and downside risks are real, though probably not as large as they were a year ago.
- General Electric could test its most recent lows, but investors should see restructuring results in 2019.
- I can see ~25 percent downside in the event of a major earnings miss and deteriorating investor sentiment.
- How much downside does GE have?
General Electric's (GE) shares continue to exhibit an attractive risk/reward-combination for patient investors that want to bet on a successful restructuring of GE's core businesses. General Electric has some specific downside risks that could weigh on the industrial company's share price over the short haul. Nonetheless, the risk/reward remains attractive, and a price related to next week's earnings release could open up yet another buying opportunity. How low could GE's share price drop?
In my last article on General Electric titled "General Electric Is Not Going To Be A Penny Stock" I suggested that General Electric indeed had considerable upside potential in 2019 and beyond due to the following trifecta of potential positive catalysts:
