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GE’s job cuts not a good reason to buy the stock, yet–analyst

General Electric Co.’s stock rallied as much as 2.3% Thursday, before paring more than half those gains, after the industrial conglomerate said its power division was cutting 12,000 jobs, as traditional power markets, like gas and coal, have slowed. Analyst Jim Corridore at CFRA said he was not certain that the job cuts will be enough to turn around GE Power, which he said has struggled with “poor executive and demand shifts.” He reiterated his hold rating. “We still feel GE has great assets and great technology, but we think that the company faces a long drawn out restructuring, and think it’s best to wait for signs of improvement before adding to positions,” Corridore wrote in a note to clients. Separately, Moody’s Corp. credit officer Rene Lipsch said the magnitude of the jobs cuts reflect the “severity” of the challenges GE Power faces, and that he will be looking, “over the next two years,” the extent to which the move allays his concern about overcapacity and pricing. GE’s stock was up 0.7% in afternoon trade. It has tumbled 26% over the past three months, while the Dow Jones Industrial Average has gained 11%.

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