General Electric stock forecast, let’s start from the top. General Electric (NYSE: GE) is a multinational conglomerate that’s in many industries. Founded in 1892, GE is one of America’s oldest companies still in existence today. In fact, the company was originally created to bring Thomas Edison’s lighting businesses under one roof. Hence the name: General Electric.
General Electric was first called Edison General Electric Company before being later renamed General Electric. Of course, lighting was a novel concept in Edison’s day. But now that it is more of a commodity, General Electric’s business is much broader. It has business in many sectors, including aviation, renewable energy, weapons manufacturing, locomotives, venture capital and more.
General Electric might be one of America’s older businesses, but in reality, that says nothing about whether GE stock is a good buy today. Given that it operates in so many sectors now, its business is always changing, so we must look at the current General Electric stock forecast to see whether it’s worth buying.
General Electric is an enormous company. It was ranked within the top 50 of Fortune 500’s largest companies. Indeed, this company stopped being about just lightbulbs long ago. The company is based in Boston, Massachusetts, but it has locations in 130 countries. Perhaps needless to say, GE also employs a large number of people; it had 202,000 employees as of 2020.
GE has operated several division that no longer exist. In 2008, it had planned to auction off its appliance division, although that sale fell through. Then, in 2014, it dissolved its appliances and lighting division. It also had a transportation division that merged with Wabtec in 2019.
Today, it’s businesses include additive manufacturing, aviation, capital, healthcare, power, renewable energy, research and licensing. Understanding the entire company is useful for coming up with a better GE stock forecast.
GE Stock Forecast and Performance Outlook
GE stock did not take as big a hit as some stocks did due to COVID-19. Its share price did fall from around $100 at the beginning of 2020 to around $50 in March. Although, some other stocks saw much bigger drops. Since then, its share price has steadily climbed and is about equal to its pre-pandemic price point.
In the past six months, the stock’s price has gone up and down, fluctuating between about $105 and $95. It saw its high point in recent months at the end of October when it topped $107. At the moment, it’s at a higher point coming close to $110. This upward momentum is good to see.
Currently, many analysts of the stock show that it’s undervalued and likely to increase in price over the next 12 months. Thus, look for this stock to go up in price—though not tremendously so.
GE Quarterly Financials
GE recent quarterly earnings report for September 2021 looks encouraging. For instance, despite a slight (0.54%) decrease in revenue, its net income is up 210% year-over-year to $1.26 billion. Its EPS is up 199% to $1.08, and its profit margin is improving as well, coming in at 6.82%.
It has also increased its operating income. In fact, its operating income was negative the previous quarter, but his past quarter, it was $887 million. Plus, its net change in cash was $2.2 billion, a big increase year-over-year.
GE Earnings vs. Predictions
As far as how GE is doing compared to EPS and revenue predictions, things look great for the former and lukewarm for the latter. It has been beating EPS predictions by wide margins, and it has beat revenue predictions in two of the last four quarters. When it comes to accurate GE stock forecasts, this pattern is useful to consider.
What stands out the most among its EPS predictions Q1 2021. In that quarter, it beat its EPS projection by 242%. That being said, its EPS was only projected to be $0.07, while it recorded a $0.24 EPS. In the last two quarters, it still managed to beat EPS projections by 50% and then by 30% despite having a higher EPS than it had at the beginning of the year. Its most recent reported EPS was $0.57.
How to Buy GE Stock
GE stock might have modest gains over the next 12 months. That may not be exciting for most investors, but its diverse business model and long history give the company the sort of stability that many will appreciate.
If you want to buy GE stock, it’s easy to find on the open market. As with any stock, you have a couple of options:
- Buy shares in a brokerage account or IRA. You can buy shares of GE stock directly through your favorite online broker. Whether you want to buy shares in a brokerage account or IRA, just search General Electric or its ticker, GE and place an order.
- Buy shares in an ETF. There are many ETFs that include GE stock. In fact, there are over 150 ETFs that include it. In addition to total-market ETFs, you can buy shares in many ETFs, such as FMIL, VIS, UPRO, XLI, and plenty more.
I hope you’ve enjoyed this GE stock forecast. And it’s always important to consider the risk, as well as do your own research. This is just one of many stocks out there…
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Since CEO Larry Culp took the helm of industrial giant General Electric (NYSE:GE), the company’s long-term investors have hoped for a turnaround. Unfortunately, the onset of the Covid-19 pandemic made it difficult for GE stock to rebound. It’s also frustrating that the share price has gone nowhere since March. When will the breakout moment finally happen?
Some folks might have hoped for a huge rally after General Electric reported its financial results not long ago. That rally didn’t happen, even though the numbers looked positive overall.
Still, if the market doesn’t appreciate General Electric’s progress yet, then this is just an opportunity to consider purchasing some shares.
Besides, one prominent Wall Street analyst isn’t sleeping on General Electric now, and is even preparing for upside in the stock price.
GE Stock at a Glance
It’s actually quite extraordinary, if you think about it, that GE stock stayed in such a tight range from March through October. The $105 level has been a magnet for this stock, which is undoubtedly frustrating for some of the shareholders. Moreover, General Electric’s forward annual dividend yield hovering around 0.30% doesn’t do much to sweeten the deal.
Still, it’s important to keep things in perspective. GE stock has doubled since it bottomed out in mid-May of 2020. Besides, the share price is higher than where it started in January, which was around $84. Also, market technicians understand that stocks can stage sharp rallies after going sideways for a long time.
In other words, GE stock won’t stay stuck in a tight range forever. If you still believe in this iconic American company, then there’s no reason to dump your shares now.
The Cash Is Flowing
If you’re still not convinced, then perhaps a look at General Electric’s recently reported financial should get you motivated.
Let’s start with the basics. During the third quarter of 2021, General Electric earned 57 cents per share. That result represents a healthy 19% year-over-year increase. Plus, General Electric beat Wall Street’s expectation of 43 cents per share.
Now, I must acknowledge that the company didn’t get straight A’s on its fiscal report card.
Specifically, General Electric generated third-quarter revenues of $18.42 billion, marking a 5% year-over-year decline. That figure also missed the analysts’ expectation of $19.29 billion in revenues. It’s not a wide miss, though, and there’s positive news within the details. Reportedly, General Electric’s core aviation segment revenues rose 10% on a year-over-year basis.
That’s crucial, General Electric’s focus under Culp has generally revolved around the company’s aviation business.
Here’s what might be the best part of the fiscal report, though. In the third quarter, General Electric recorded industrial free cash flow (FCF) of $1.7 billion.
Unlocking Value
That’s close to double what Wall Street’s analysts were expecting, and is a significant improvement over the cash burn of $199.5 million from the year-ago period.
Such a sharp increase in FCF is impressive in a time of global supply chain issues and American worker shortages.
this improvement has left an impression on Bank of America analyst Andrew Obin, who assured that consistent FCF improvements should unlock value for GE investors over the medium term.
Looking ahead, Obin remains confident in General Electric. He asserts that the company’s aviation unit will lead General Electric’s revenue growth turnaround in 2022 by increasing 20% from 2021 levels. Furthermore, Obin projects that General Electric’s 2022 net income will reach $4.36 billion, a figure which would be more than twice the 2021 total.
Bearing all of that in mind, the Bank of America analyst reiterated his “buy” rating on GE stock, and granted it an ambitious $128 price target. General Electric split up
To Sums Up
Challenges presented by supply chain bottlenecks and other issues have made it more difficult for industrial businesses to thrive in 2021.
