There is no short-term turnaround in sight for General Electric’s power business, according to UBS.
The firm lowered it price target to $13 from $16 for GE shares, citing pricing pressures and share losses in the key market. UBS also reiterated its neutral rating for the industrial giant.
“Power market improvement is needed to make a meaningful impact on earnings, but we see signs the market is deteriorating,” analyst Steven Winoker said in a note to clients Wednesday. “While cost-out remains a primary focus for the business, the end markets are far from cooperative with regard to pricing, demand and competition — and if anything require even more aggressive cost reductions, forcing GE into a vicious cycle.”