Tusa, a long-time bear on the stock, cited significant liabilities and little free cash flow to support the company's ongoing reset and cut his rating to "underweight" from "neutral", an about-turn from an upgrade in December.
"Investors are underestimating severity of challenges and underlying risks at GE and overestimating value of small positives," Tusa wrote in a note.
Tusa said investors are "significantly over projecting" the bounce in free cash flow and sees weakness in the company's power and renewables unit.
Listing the challenges faced by the industrial conglomerate, Tusa said GE Capital Services unit is likely to consume cash for the foreseeable future, with aviation fundamentals weaker than what meets the eye.
GE could lose as much as $2 billion (1.53 billion pounds) in cash from its industrial businesses in 2019, Chief Executive Officer Larry Culp said in March, setting conservative profit targets for the year.
He called 2019 a "reset year" and said though there was short-term pain for the company, free cash flow at GE Power would turn positive in 2021.
Culp has an uphill task of placating investors who have dumped the stock as the company racked up staggering losses of more than $30 billion over the last two years and cut its dividend to near zero.
Analysts at research firm Gordon Haskett expect the company to report a negative cash flow of $2.4 billion to $2.5 billion for the first quarter.
"This time around, we find it extraordinary that some analysts are suggesting that a potential GE free cash flow loss of up to $4 billion this Q (vs a loss of $1.7 bln in 1Q18) would be 'fair' or 'expected'," analyst John Inch at Gordon Haskett said.
"We believe that magnitude of cash loss could be both highly problematic and poorly received by the bond market and debt ratings agencies."
GE will report its quarterly results on April 30.
The company's shares were down at $9.30 in mid-day trading.
(Reporting by Rachit Vats in Bengaluru; Editing by Sriraj Kalluvila)