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General Electric (GE) Dips More Than Broader Markets: What You Should Know

Zacks Equity Research

General Electric (GE) closed the most recent trading day at $8.72, moving -0.91% from the previous trading session. This move lagged the S&P 500's daily loss of 0.14%. At the same time, the Dow lost 0.11%, and the tech-heavy Nasdaq lost 0.1%.

Heading into today, shares of the industrial conglomerate had lost 4.97% over the past month, lagging the Conglomerates sector's loss of 3.09% and the S&P 500's loss of 0.91% in that time.

Investors will be hoping for strength from GE as it approaches its next earnings release, which is expected to be October 30, 2019. On that day, GE is projected to report earnings of $0.12 per share, which would represent a year-over-year decline of 14.29%. Our most recent consensus estimate is calling for quarterly revenue of $29.11 billion, down 1.57% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $0.61 per share and revenue of $113.14 billion, which would represent changes of -6.15% and -6.97%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for GE. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. GE is currently sporting a Zacks Rank of #3 (Hold).

Digging into valuation, GE currently has a Forward P/E ratio of 14.51. Its industry sports an average Forward P/E of 14.51, so we one might conclude that GE is trading at a no noticeable deviation comparatively.

Also, we should mention that GE has a PEG ratio of 2. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. GE's industry had an average PEG ratio of 1.79 as of yesterday's close.

The Diversified Operations industry is part of the Conglomerates sector. This industry currently has a Zacks Industry Rank of 153, which puts it in the bottom 40% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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