A J.P. Morgan analyst who has been long bearish on General Electric upgraded the embattled industrial giant's shares on Thursday, saying GE now has a more "balanced risk reward at current levels."

The Wall Street firm raised its rating on GE's stock to neutral from underperform and removed the company from a list of stocks it recommended shorting.

"Key to the story, in our view, is the outcome of 'known unknowns' in near term, which are better understood and around which debate is more balanced, as opposed to being overlooked by most bulls in the past," analyst Stephen Tusa said in an investor note.

"We now believe a more negative outcome on these liabilities (equity dilution is one) is at least partially discounted, and it's possible the company can execute its way through an elongated workout that limits near-term downside," Tusa added.

GE shares jumped 7.3 percent in trading Thursday to close at $7.20 a share.

Tusa put out a bearish note on GE in May 2016, when the stock was above $30, questioning the conglomerate's earnings and cash flow outlook. As the shares plummeted, Tusa gained a following on Wall Street with his later calls, such as that the dividend would have to be cut, coming true. His notes on the company will often move the stock on the days they come out.