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

Zacks Equity Research
Rambus (RMBS) doesn't possess the right combination of the two key ingredients for a likely earnings beat in its upcoming report. Get prepared with the key expectations.

In the latest trading session, General Electric (GE) closed at $9.89, marking a -1.1% move from the previous day. This change lagged the S&P 500's daily gain of 0.82%. Elsewhere, the Dow gained 0.82%, while the tech-heavy Nasdaq added 0.64%.

Coming into today, shares of the industrial conglomerate had lost 1.09% in the past month. In that same time, the Conglomerates sector lost 5.53%, while the S&P 500 lost 4.58%.

Wall Street will be looking for positivity from GE as it approaches its next earnings report date. The company is expected to report EPS of $0.12, down 36.84% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $28.88 billion, down 4.07% from the year-ago period.

GE's full-year Zacks Consensus Estimates are calling for earnings of $0.61 per share and revenue of $118.47 billion. These results would represent year-over-year changes of -6.15% and -2.59%, respectively.

Investors might also notice recent changes to analyst estimates for GE. Recent revisions tend to reflect the latest 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, 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. Within the past 30 days, our consensus EPS projection remained stagnant. GE is currently sporting a Zacks Rank of #2 (Buy).

Investors should also note GE's current valuation metrics, including its Forward P/E ratio of 16.48. This represents a premium compared to its industry's average Forward P/E of 16.24.

Meanwhile, GE's PEG ratio is currently 2.27. 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 1.85 as of yesterday's close.

The Diversified Operations industry is part of the Conglomerates sector. This industry currently has a Zacks Industry Rank of 66, which puts it in the top 26% 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.

To follow GE in the coming trading sessions, be sure to utilize Zacks.com.


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