UTX - Leading Analyst Questions the Value of GE's Aviation Segment: The Lowdown
J.P. Morgan investment analyst Steve Tusa recently took aim at General Electric (NYSE: GE) Aviation and argued the case for a valuation significantly lower than most analysts'. The JP Morgan analyst's previous calls regarding GE have proven accurate, so it's probably a good idea for investors to take a stock check on GE Aviation and how it fits within GE's valuation. Here's what you need to consider before accepting the bearish case.
In a nutshell, Tusa's view is that a decline in spare engine sales and margin pressure from a shift in aftermarket sales -- both connected to shifts in sales from the older CM56 engine to the LEAP -- will lead to a decline in GE Aviation profit to just $5.7 billion in 2020.
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