The lights are flickering again at General Electric, whose shares on Friday tumbled near their lowest levels since the financial crisis over fresh alarm bells raised by Goldman Sachs.
Analysts at the Wall Street bank warned of “further headwinds” for the company’s finance unit, GE Capital, and wondered where the bottom is for the conglomerate’s ailing power business, which has been slammed by overly aggressive bets on natural gas-fired turbines.
“We think there are still more questions than answers around GE,” Goldman analyst Joe Ritchie concluded after he and his team pored through GE’s quarterly filings.
The Goldman team slashed its 12-month price target by 25 percent, to $9 a share.
Panicked investors on Friday sent the stock down more than 5 percent, to $7.73 — just a penny above a 52-week low it hit on Monday, although still above when the shares ominously closed at $6.66 in March 2009.
GE shares have tumbled 54 percent this year as worries mounted about the company’s balance sheet, as well as an October disclosure that the Justice Department and Securities and Exchange Commission expanded their probe into its accounting practices.
Former Danaher Chief Executive Larry Culp took the helm of the company in October, replacing John Flannery, who left after only 14 months amid criticism he wasn’t moving fast enough to right the sinking ship.
Last month, after months of rumors that it would be abandoning its 119-year-old dividend, GE slashed its dividend to just a penny a share — down from 12 cents.
Former GE CEO Jeffrey Immelt, who was ousted in June 2017, acknowledged problems at the once-mighty conglomerate Thursday.
“The business has to be torn apart,” Immelt said to an audience at the World Business Forum in New York.
General Electric’s stock got a reprieve later Friday after the company announced it sold its $1.5 billion health care equipment finance portfolio to TIAA Bank as part of GE’s continued efforts to become “smaller and more focused.”
Proceeds of the sale will also be used to attack GE’s debt load.
“This is an excellent outcome for GE Capital, GE Healthcare and its customers,” Trevor Schauenberg, CEO of GE Capital Industrial Finance, said in a statement Friday.
Shares pared losses to end the day down 1.7 percent, at $8.03.
