General Electric (GE) shares popped on Monday after it was announced that CEO Jeff Immelt is stepping down. Market expert Louis Navellier, however, has not been convinced to buy the stock.
With sales and earnings expected to be down this quarter and with GE being a multinational, Navellier believes the company is going to be hurt by a strong dollar. The chairman and founder of Navellier & Associates told CNBC’s “Closing Bell,” “This company is lost, and until we have positive forecasts in sales and earnings, I don’t want to go near it.”
On Monday, GE closed up 3.5 percent. The stock hit its 52-week low on May 18 and is down 29 percent since Immelt began his tenure at GE on September 7, 2001. GE has been the worst performer of the Dow Jones Industrial Average since that time. Immelt effectively steered the digital industrial conglomerate through the financial crisis, but also oversaw company shares lose nearly a third of their value on worries about the its growth. Barclays managing director Scott Davis described Immelt’s time at GE as “an unmitigated disaster for shareholders.”
John Flannery, the current head of GE’s healthcare unit, will replace Immelt as CEO, effective August 1, and as chairman after Immelt retires on December 31.
While Navellier is hoping that Flannery will focus on the domestic front, he does not expect GE will hit the gas anytime soon, even with a new CEO. According to a post on Navellier Growth, GE sales are expected to fall 13.3% and earnings are expected to plunge 51% this quarter. And since analysts have cut this quarter’s consensus EPS estimate by 19.3% over the past few weeks, it is safe to suggest that GE will struggle to meet analysts’ estimates going forward.
Navellier has given GE a D-rating overall in his Portfolio Grader screening tool, which you can view here.
Danita White for TechFunnel.com
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