CFRA analyst Colin Scarola reiterated his $6 price target for General Electric Co.'s stock (GE), which is 9.4% below current levels, citing his outlook for "poor cost performance" after the industrial conglomerate reported disappointing second-quarter results ( ), which included a "severe decline" in revenue for GE's Aviation business. "The [COVID-19] pandemic's outsized impact on air travel is driving the downturn in Aviation, but we note a materially worse trend than similar businesses," such as at rival Raytheon Technologies Corp. (RTX). GE Aviation revenue fell 44% to $4.38 billion, missing the FactSet consensus of $4.62 billion. Meanwhile, Raytheon reported Tuesday that Collins Aerospace sales fell 35% to $4.30 billion, above expectations of $3.56 billion, according to FactSet. And Honeywell International Inc. (HON) reported on July 24 aerospace sales that dropped 28% to $2.54 billion, but beat the FactSet consensus of $2.41 billion. Scarola said despite his "poor outlook for GE's demand and cost performance," he was keeping his rating at hold, as the 40% year-to-date decline leaves shares near fair value. Over the same time, the Dow Jones Industrial Average has lost 6.9%.
-Tomi Kilgore; 415-439-6400; AskNewswires@dowjones.com
(END) Dow Jones Newswires
July 29, 2020 16:19 ET (20:19 GMT)
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