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

Zacks Equity Research
Crown Castle (CCI) reported earnings 30 days ago. What's next for the stock? We take a look at earnings estimates for some clues.

In the latest trading session, General Electric (GE) closed at $12.86, marking a +1.58% move from the previous day. This change outpaced the S&P 500's 0.13% gain on the day. Meanwhile, the Dow gained 0.61%, and the Nasdaq, a tech-heavy index, lost 0.08%.

Heading into today, shares of the industrial conglomerate had gained 0.24% over the past month, lagging the Conglomerates sector's gain of 4.24% and the S&P 500's gain of 2.1% in that time.

Investors will be hoping for strength from GE as it approaches its next earnings release, which is expected to be October 19, 2018. On that day, GE is projected to report earnings of $0.22 per share, which would represent a year-over-year decline of 24.14%. Meanwhile, our latest consensus estimate is calling for revenue of $29.89 billion, down 10.7% from the prior-year quarter.

GE's full-year Zacks Consensus Estimates are calling for earnings of $0.97 per share and revenue of $121.58 billion. These results would represent year-over-year changes of -7.62% and -0.42%, respectively.

Investors might also notice recent changes to analyst estimates for GE. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for 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 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. Within the past 30 days, our consensus EPS projection remained stagnant. GE currently has a Zacks Rank of #3 (Hold).

Digging into valuation, GE currently has a Forward P/E ratio of 13.09. Its industry sports an average Forward P/E of 19.07, so we one might conclude that GE is trading at a discount comparatively.

Meanwhile, GE's PEG ratio is currently 2.38. 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. Diversified Operations stocks are, on average, holding a PEG ratio of 1.74 based on yesterday's closing prices.

The Diversified Operations industry is part of the Conglomerates sector. This group has a Zacks Industry Rank of 81, putting it in the top 32% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. 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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