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General Electric (GE) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research

In the latest trading session, General Electric (GE) closed at $10.63, marking a +1.24% move from the previous day. This move outpaced the S&P 500's daily gain of 0.77%. At the same time, the Dow added 0.44%, and the tech-heavy Nasdaq gained 1.06%.

Coming into today, shares of the industrial conglomerate had gained 10.88% in the past month. In that same time, the Conglomerates sector gained 6.29%, while the S&P 500 gained 5.12%.

GE will be looking to display strength as it nears its next earnings release. In that report, analysts expect GE to post earnings of $0.12 per share. This would mark a year-over-year decline of 36.84%. Meanwhile, our latest consensus estimate is calling for revenue of $28.88 billion, down 4.07% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $0.61 per share and revenue of $118.47 billion, which would represent changes of -6.15% and -2.59%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for GE. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. GE is holding a Zacks Rank of #2 (Buy) right now.

Valuation is also important, so investors should note that GE has a Forward P/E ratio of 17.31 right now. For comparison, its industry has an average Forward P/E of 17, which means GE is trading at a premium to the group.

We can also see that GE currently has a PEG ratio of 2.39. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. GE's industry had an average PEG ratio of 1.86 as of yesterday's close.

The Diversified Operations industry is part of the Conglomerates sector. This industry currently has a Zacks Industry Rank of 96, which puts it in the top 38% 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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