General Electric still needs billions of dollars in additional capital to pacify investors and credit rating agencies, according to J.P. Morgan.

“With little available cash flow to naturally de-lever, we don’t see how, from a risk mitigation perspective, a company of this size and complexity cannot be seriously considering at least a dividend cut and/or a more aggressive approach to reinforcing its capital base,” analyst Stephen Tusa wrote Tuesday.

Hoping to ease such concerns, the besieged industrial conglomerate announced Monday its decision to merge its transportation business with Wabtec in a transaction valued at $11.1 billion. Wall Street applauded the announcement as the stock closed up nearly 2 percent Monday.

And while General Electric will receive $2.9 billion in cash at the merger’s close, J.P. Morgan believes the company remains well short of a healthy balance sheet.

“Even after transportation, we see the need for roughly $32 billion in capital to mathematically hit 2.5x leverage, well in excess of the initial $20 billion ‘in value’ investors had been treating as a silver bullet, and a target GE is clearly missing,” Tusa added.

General Electric did not immediately respond to CNBC’s request for comment.

The transportation deal is the first major step for General Electric chief executive John Flannery, who took the reins last August. The CEO is in the middle of a strategic review of the company that could lead to other segment separations before the company stabilizes.

The company also cut its quarterly payout in half last year in an effort to free up some cash.

The transportation unit – which largely builds trains – is one of the company’s smaller units, representing slightly more than 3 percent of the company’s total revenue, according to FactSet data.

“The offset to these negatives has simply been yet another change in how the company reports adjusted EPS, and related guidance that is ‘unchanged,’ with a series of restatements that helped to further obfuscate,” Tusa wrote.

“If the outcome of the next several months is more complex, financially engineered moves short on cash, and built on promises around future growth, on the back of perpetually adjusted numbers, we scratch our heads as to how that cannot be juxtaposed to the ‘fresh start/reset’ narrative.”

The analyst reiterated his underweight rating on the stock as well as his 12-month price target of $11, implying 27 percent downside over the next year.

GE’s stock is down more than 45 percent in the past 12 months through Monday’s close versus the S&P 500’s nearly 15 percent return.