Why Shares in General Electric Bucked the Market Today
Shares in industrial giant General Electric (NYSE: GE) bucked the market today by spending most of it in positive territory, while the S&P 500 index did the opposite. The move comes as investors moved into the stock after a period of underperformance following a presentation by CFO Carolina Dybeck Happe at the Morgan Stanley Laguna Conference on Sep. 15.
There's no way to get around the fact that the presentation was disappointing. In a nutshell, Dybeck Happe told investors that GE's supply chain challenges were ongoing, and equipment deliveries were moving to later in the quarter. That's something likely to impact earnings and the timing of cash flows. Indeed, she prepared investors to expect third-quarter free cash flow (FCF) to be similar to what it was in the second quarter. As such, it's hard to see how GE can get close to its implied FCF guidance for 2022.
As such, it was no surprise to see the stock sell-off after the presentation, but now the disappointment has possibly been priced in, and value investors might have started moving into the stock.
Source Fool.com
