The Ratings Game: GE’s stock plunges again as another analyst abandons bullish view

General Electric Co.’s stock fell further Tuesday, after new Chief Executive John Flannery’s long-awaited transformation plan fell flat, leading another analyst to abandon his bullish view.

Shares of the industrial conglomerate GE, -6.18%   tumbled 4.2% to a 5 1/2-year low. Volume swelled to over 53 million shares, enough to make the stock the most actively traded on the major U.S. exchanges.

The selloff comes after a 7.2% plunge on Monday, which was the biggest one-day selloff in 8 1/2 years.

The stock has plummeted 42% year-to-date, by far the worst performer within the Dow Jones Industrial Average DJIA, -0.24% which has climbed 18% during the same period. GE’s stock was also the worst Dow performer on a 1-month, 3-month, 6-month and 12-month basis.

Flannery had five months to craft a plan that could give investors and analysts some hope that a bottom was near. But RBC Capital analyst Deane Dray, who had been one of just five of 19 analysts surveyed by FactSet who were bullish on GE, cut his rating Tuesday to sector perform, as he now believes the company’s turnaround will be “more protracted than previously anticipated.”

“While the market was not expecting any quick fixes, we believe that CEO John Flannery’s highly anticipated plan fell short of expectations regarding the scope of the business model/portfolio changes,” Dray wrote in a note to clients. “We viewed the new disclosures about missteps at Power and [free cash flow] shortfalls as particularly unsettling.”

Don’t miss: Opinion: There’s still some good at GE — but much more bad and ugly.

GE said Monday that poor planning and operational execution, in the face of a more competitive market suffering from overcapacity, weighed on its power business, and could continue to put pressure on pricing.

The company also said that because of new revenue recognition rules that go into effect in January, which were approved by the Securities and Exchange Commission about three years ago, would lead it to report 2017 “industrial free cash flow” of $3 billion, compared with how it currently reports industrial cash flow from operating activities of $7 billion.

“The bottom line is that Mr. Flannery’s plan fell short of the sweeping reset that investors were looking for after the five-month wait,” Dray wrote.

See also: How to avoid the next GE — and find industrial winners of the future.

Dray becomes the fourth analyst in the past few weeks to give up their bullish view on GE, and the 10th to cut their price target, according to FactSet data. Two analysts had turned bearish over the same time, bringing the total with the equivalent of sell ratings on GE to four.

J.P. Morgan’s C. Stephen Tusa, who has been bearish on GE since May 2016, said even he was expecting more from Flannery, as the cost-out targets “were not as ambitious as most expected.”

He kept his rating at underweight and stock price target at $17, which is about 9% below current levels.

“While the investor meeting had the feeling to us of an all-hope-is-lost event, and we appreciate a frank discussion of the issues from new management, the lowered numbers and validation of fundamental challenges at hand reinforce our view of downside in the stock,” Tusa wrote.

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