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Shares of General Electric (GE 9.27, -0.74, -7.34%) are under pressure at the start of the week after JPMorgan's Stephen Tusa downgraded the stock to Underweight this morning.

Mr. Tusa is known as the ‘axe' on GE because he was correctly bearish on the stock, which lost more than two-thirds of its value over the last two years.

GE was up 49% since JPMorgan upgraded it to Neutral last December, which essentially marked a bottom in the stock. However, he did remain cautious with a $6 price target.

JPMorgan thinks the stock may have gotten ahead of itself, downgrading it back to Underweight while cutting its price target to a street low of $5/share. Mr. Tusa wrote that "Investors are underestimating the severity of the challenges and underlying risks at GE, while overestimating the value of small positives."

The company's weak cash flow outlook, and continued softness in the power and renewables segments remain the primary culprits.

Recall, on March 14, GE unveiled a rather sobering financial outlook. The company guided fiscal 2019 adjusted EPS below consensus at $0.50-0.60/share and Industrial free cash flow of ($2)-0 bln. Encouragingly, management said Industrial free cash flow would turn positive in 2020 and show accelerating improvement in 2021.

Investors were hoping that most if not all of the bad news was now in the rear-view mirror. JP Morgan thinks investor optimism regarding CEO Larry Culp's turnaround became excessive as estimates continue to go in the wrong direction.

With an enterprise value ~14.5x EBITDA estimates for 2019, GE's valuation was roughly in-line with 3M (MMM) and Honeywell (HON) coming into today. The stock remains the most expensive relative to a group of large cap industrial peers in terms of free cash flow.