General Electric (GE, $9.14) expects negative free cash flow in 2019
In a meeting with a J.P. Morgan Chase (JPM) analyst on Tuesday, the CEO of General Electric, Larry Culp, said that the company’s free cash flow – money left over after a company pays for operating expenses and capital spending – will be negative in 2019. After Culp’s comments, GE’s shares plunged nearly 4.7% to end the day at $9.89.
Free cash flow is often an indicator of a company's operating efficiency and as such is closely watched by investors.
The company generated ~$4.5 billion of free cash flow last year, but if it’s going negative from there, that means it is struggling with a few pressing issues. According to Culp, these are a combination of operational pressure, power, renewables, and then the non-operational pressures which he calls ‘policy.’ Culp further added that he is currently focussing on improving the company’s cash generation, as well as cutting costs.
However, prior to this meeting, the J.P. Morgan analyst had already warned investors not to get blind-sided by GE’s apparent gains, as the company’s prized aviation financing and leasing business are already in liquidation mode and has weakening earnings.
In reply, Culp assured that his team is fully committed to improve their disclosers and that investors need to remain patient through the restructuring process.
Despite this assurance, Culp has painted a realistic picture of where GE’s battered power business will struggle even more than last year resulting in a greater level of negative free cash flow. It may take another two years to turn around in this segment.
Culp also confirmed oxidation issues with the company’s line of gas-fired power turbines, called H-class turbines. But he added that these have been timely addressed by already upgrading 23 out of the 33 turbines.
Aroon Indicator for GE shows an upward move is likely
GE's Aroon Indicator triggered a bullish signal on June 11, 2025. Tickeron's A.I.dvisor detected that the AroonUp green line is above 70 while the AroonDown red line is below 30. When the up indicator moves above 70 and the down indicator remains below 30, it is a sign that the stock could be setting up for a bullish move. Traders may want to buy the stock or look to buy calls options. A.I.dvisor looked at 364 similar instances where the Aroon Indicator showed a similar pattern. In of the 364 cases, the stock moved higher in the days that followed. This puts the odds of a move higher at .
Technical Analysis (Indicators)
Bullish Trend Analysis
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where GE advanced for three days, in of 338 cases, the price rose further within the following month. The odds of a continued upward trend are .
Bearish Trend Analysis
The 10-day RSI Indicator for GE moved out of overbought territory on June 10, 2025. This could be a bearish sign for the stock. Traders may want to consider selling the stock or buying put options. Tickeron's A.I.dvisor looked at 37 similar instances where the indicator moved out of overbought territory. In of the 37 cases, the stock moved lower in the following days. This puts the odds of a move lower at .
The Stochastic Oscillator may be shifting from an upward trend to a downward trend. In of 62 cases where GE's Stochastic Oscillator exited the overbought zone, the price fell further within the following month. The odds of a continued downward trend are .
The Moving Average Convergence Divergence Histogram (MACD) for GE turned negative on June 10, 2025. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 56 similar instances when the indicator turned negative. In of the 56 cases the stock turned lower in the days that followed. This puts the odds of success at .
Following a 3-day decline, the stock is projected to fall further. Considering past instances where GE declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
GE broke above its upper Bollinger Band on May 15, 2025. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating low risk on high returns. The average Profit vs. Risk Rating rating for the industry is 60, placing this stock better than average.
The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating outstanding price growth. GE’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating very strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is significantly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (13.605) is normal, around the industry mean (9.908). P/E Ratio (38.726) is within average values for comparable stocks, (63.511). GE's Projected Growth (PEG Ratio) (9.072) is slightly higher than the industry average of (2.697). Dividend Yield (0.005) settles around the average of (0.018) among similar stocks. P/S Ratio (6.729) is also within normal values, averaging (9.168).
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General Information
a manufacturer of products for the generation, transmission, distribution, control and utilization of electricity; manufactures aircraft engines and medical equipment
Industry AerospaceDefense
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