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General Electric (GE) Gains As Market Dips: What You Should Know

Zacks Equity Research
·3 min read

In the latest trading session, General Electric (GE) closed at $11.66, marking a +0.78% move from the previous day. This move outpaced the S&P 500's daily loss of 0.38%. At the same time, the Dow lost 0.22%, and the tech-heavy Nasdaq lost 0.12%.

Coming into today, shares of the industrial conglomerate had gained 5.86% in the past month. In that same time, the Conglomerates sector gained 1.46%, while the S&P 500 gained 4.12%.

Wall Street will be looking for positivity from GE as it approaches its next earnings report date. On that day, GE is projected to report earnings of $0.08 per share, which would represent a year-over-year decline of 61.9%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $21.05 billion, down 19.78% from the year-ago period.

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. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 11.45% higher within the past month. GE currently has a Zacks Rank of #1 (Strong Buy).

Valuation is also important, so investors should note that GE has a Forward P/E ratio of 36.58 right now. For comparison, its industry has an average Forward P/E of 18.51, which means GE is trading at a premium to the group.

It is also worth noting that GE currently has a PEG ratio of 8.61. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. Diversified Operations stocks are, on average, holding a PEG ratio of 1.92 based on yesterday's closing prices.

The Diversified Operations industry is part of the Conglomerates sector. This group has a Zacks Industry Rank of 113, putting it in the top 45% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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Zacks Investment Research