GE Aerospace (GE)

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J.P. Morgan's Tusa reiterates long-term negative outlook for GE
By: Seeking Alpha | December 20, 2019

• The 737 MAX production suspension is a long-term negative for General Electric (GE -0.1%) even if it returns, says J.P. Morgan analyst Stephen Tusa, and if the MAX does not return, there is a major hole in growth and ultimately cash as GE has likely taken in billions of advances.

• Boeing represents 70% of commercial engines at GE's aviation unit, which is by far the most exposed of all electrical equipment and multi-industry aero peers, Tusa says.

• While reiterating his Sell rating and $5 price target for the stock, the longtime GE bear admits he has been "too aggressive" in calling for immediate downside at GE's aviation unit.

• Another bearish analyst, Gordon Haskett's John Inch, weighs in with a unique take that the MAX grounding could help GE's near-term cash flow.

• Inch thinks a MAX shutdown extending beyond a month or so should represent a "significant future cash benefit for GE as the company won't be producing money losing engines."

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