GE shares declined 9% to $8.28 on Friday, extending their losses for the year to more than 50%.


Photo:

Michael Nagle/Bloomberg News

General Electric
Co.’s


GE -5.55%

woes are worsening.

The industrial conglomerate’s shares tumbled again Friday after analysts at

JPMorgan

Chase & Co. sharply cut their price target on the stock, underscoring the deepening questions on Wall Street about the true worth of a company that just two decades ago was the most-valuable U.S. stock.

Shares declined 9% to $8.28, extending their losses for the year to more than 50%.

The analysts, who cut their price target to $6 a share, shared a few reasons for their dimmed view of the stock: GE’s high leverage and little cash on hand, its disappointing third-quarter results and its slashed dividend. That target is 90% below the company’s all-time high of $60, reached in August 2000, and below its financial-crisis trough of $6.66 a share on March 5, 2009.

The lower target, which JPMorgan called generous under the circumstances, is the latest blow to the company, which was an original member of the Dow Jones Industrial Average and earned the distinction of being the most valuable company in America in the early 2000s. GE lost its coveted spot in the 30-stock Dow Jones Industrial Average in June.

The shares are on track for their worst one-day performance since March 2009, during the depths of the financial crisis. The fall Friday comes less than two weeks after another steep drop. On Oct. 30, shares fell 8.8% after the conglomerate cut its dividend to a token one penny a share—and revealed simultaneously that federal prosecutors had opened a criminal accounting probe into the company’s practices.

“GE is a fundamentally strong company with a sound liquidity position,” a spokeswoman for the company said.

The JPMorgan analysts said GE’s $100 billion in liabilities and nonexistent enterprise free cash flow are particularly concerning. Though the stock’s recent pullback—it is down a quarter since the start of October—may seem like capitulation, JPMorgan isn’t so optimistic. The company’s run rate, or its expected financial performance based on current financial information, will be zero in six of GE’s eight business segments by 2020, according to JPMorgan’s analysis. All eight business segments were profitable two years ago, the analysts’ note adds.

GE has transformed significantly, naming its second new CEO in less than 15 months and unveiling major portfolio changes, including billions in divestitures and plans to spin off its health-care division, among other changes, the analysts acknowledged. But they pointed to worries about poor earnings, structural concerns in key power markets and what they called an expensive stock price based on free cash flow. Going forward, the likelihood of improvement is uncertain, the analysts said.

The bottom line, according to JPMorgan: A $6 share price seems negative, but it isn’t the worst-case scenario.

Write to Corrie Driebusch at corrie.driebusch@wsj.com

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