General Electric shares soared to their best day in a decade following the Thursday’s fourth-quarter earnings report but J.P. Morgan analyst Stephen Tusa remained unconvinced by GE’s results.
“We come away from the 4Q scratching our heads at the stock reaction,” Tusa said in a note to investors. “We believe one has to make highly optimistic assumptions to get back to a run rate that supports anything near $10.”
CEO Larry Culp did not provide a forecast to shareholders for GE’s 2019 earnings, instead saying industrial revenue would be up “low-to-mid single digits” next year. While Wall Street’s consensus is that GE will report 81 cents a share of earnings in 2019, Tusa cut his estimate to 28 cents a share.
“There was no official EPS/profit guidance, and therefore no official reset,” Tusa said.
GE shares slipped 1 percent in premarket trading. The stock soared nearly 12 percent following GE’s report, closing above $10 a share for the first time since November.
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– CNBC’s Michael Bloom contributed to this report.