GE has a new analyst covering it, but he's not expecting much from the troubled stock

Larry Culp, CEO, General Electric

Scott Mlyn | CNBC

Morgan Stanley began coverage of General Electric with an equal weight rating, but the firm is cautious on the embattled industrial conglomerate's stock, citing timing and unresolved risks.

"We believe that the bull and bear cases are very wide for GE, but so is the range of uncertainty around the base case," Morgan Stanley analyst Joshua Pokrzywinski said in a note to investors on Wednesday evening.

GE shares were up 2.3% Thursday from its previous close of $8.80 a share. Morgan Stanley has a $10 a share price target on GE.

Pokrzywinski said it's sensible to consider investing in GE, given the potential reward if CEO Larry Culp can turn GE's stock around in earnest.

"The issue, in our view, is that a reasonable valuation and strength in the Aviation platform are offset by opaque potential cash needs in Long-Term Care (LTC) and the long-term market and share potential in Power as competition evolves," Pokrzywinski said.

Pokrzywinski's reference to GE's long-term care insurance unit comes after a whistleblower report last month tanked GE's stock. Published by Bernie Madoff whistleblower Harry Markopolos, the report alleged that GE is hiding massive losses in its long-term care unit. GE, in a statement from Culp, called the allegations false and driven by market manipulation.

GE's stock is up nearly 21% this year. But the stock was up even higher just over a month ago, losing half this year's gains after the company reported second quarter earnings and deepening its slide after the whistleblower report.

– CNBC's Michael Bloom contributed to this report.

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