U.S. Markets closed

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

Zacks Equity Research

In the latest trading session, General Electric (GE) closed at $11.16, marking a +0.72% move from the previous day. This change outpaced the S&P 500's 0.3% gain on the day. Elsewhere, the Dow gained 0.27%, while the tech-heavy Nasdaq added 0.3%.

Coming into today, shares of the industrial conglomerate had lost 0.72% in the past month. In that same time, the Conglomerates sector gained 1.24%, while the S&P 500 gained 2.69%.

Investors will be hoping for strength from GE as it approaches its next earnings release, which is expected to be January 29, 2020. The company is expected to report EPS of $0.12, down 29.41% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $26.15 billion, down 21.41% from the year-ago period.

Investors should also note any 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. 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. Over the past month, the Zacks Consensus EPS estimate remained stagnant. GE is holding a Zacks Rank of #3 (Hold) right now.

Valuation is also important, so investors should note that GE has a Forward P/E ratio of 18.16 right now. This represents a premium compared to its industry's average Forward P/E of 17.35.

Investors should also note that GE has a PEG ratio of 2.69 right now. 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 2.23 as of yesterday's close.

The Diversified Operations industry is part of the Conglomerates sector. This group has a Zacks Industry Rank of 99, putting it in the top 39% 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.

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


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
General Electric Company (GE) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.