GE - General Electric Company
| Previous Close | 10.06 |
| Open | 10.08 |
| Bid | 10.05 x 39400 |
| Ask | 10.07 x 900 |
| Day's Range | 10.03 - 10.19 |
| 52 Week Range | 6.40 - 13.25 |
| Volume | 34,653,924 |
| Avg. Volume | 52,271,574 |
| Market Cap | 87.557B |
| Beta (3Y Monthly) | 1.01 |
| PE Ratio (TTM) | N/A |
| EPS (TTM) | -2.08 |
| Earnings Date | Jul 31, 2019 |
| Forward Dividend & Yield | 0.04 (0.40%) |
| Ex-Dividend Date | 2019-06-28 |
| 1y Target Est | 12.58 |
- Yahoo Finance Video•2 days ago
NASA CFO looks ahead to space race on 50th anniversary of Apollo 11 moon landing
With the 50th anniversary of the Apollo 11 moon landing, Americans are celebrating nationwide and looking ahead to the next 50 years. Seana Smith and NASA CFO Jeff DeWit discuss.
- Motley Fool•2 days ago
Where Will GE Be in 5 Years?
Let's analyze the longer-term outlook for General Electric and explain the near-term headwinds.
- American City Business Journals•2 days ago
New PE firm buys Baker Hughes business line
Houston-based Baker Hughes, a GE Company, (NYSE: BHGE) is selling one of its business lines to a private equity firm. The deal, in which Arcline Investment Management will purchase Baker Hughes’ reciprocating compression division, is expected to close in the third quarter, according to an emailed Baker Hughes statement.
- InvestorPlace•3 days ago
Aviation Is the Rope in the Tug of War Over GE Stock
After a big rally, General Electric (NYSE:GE) stock has stalled out. General Electric stock has traded sideways for about a four and half months now, staying mostly in a range between $9 and $10.25.Source: Shutterstock It's not terribly difficult to see why that is. After a long decline over the last few years - including two dividend cuts - investors and analysts don't entirely trust General Electric stock. To some, including InvestorPlace columnist Dana Blankenhorn, GE's debt and pension liabilities suggest years of pain ahead. To others, the long-awaited turnaround is at hand. * 7 Stocks Top Investors Are Buying Now Increasingly, it seems like it will be GE Aviation that determines whether the bulls or bears will prove correct. That's not terribly surprising, of course: Aviation is GE's most profitable, and likely its most valuable, business. It generated roughly 60% of the company's segment-level profit last year, according to General Electric's 10-K filing.InvestorPlace - Stock Market News, Stock Advice & Trading TipsBut the gap between bulls' and bears' views of what Aviation truly is worth appears to be widening. The issues at Boeing (NYSE:BA) add a dose of uncertainty to the debate. Skeptics and believers see the unit's performance at the recent Paris Air Show very differently. Indeed, they see the future of the unit very differently.Heading into the second half of 2019, with GE's Q2 earnings two weeks away, it seems likely that the continuing argument over GE stock is going to come down to GE Aviation. A Big Win for GE AviationOn its face, the Paris Air Show last month - the industry's biggest event - seems like a win for General Electric. GE Aviation and its joint venture booked a record combined $55 billion in orders, per a company press release. That was up from $31 billion the year before.Obviously, that $55 billion isn't turning into revenue in 2020 or even necessarily by 2025. But with commercial aircraft demand still strong, it suggests that GE Aviation at worst is keeping pace with competing engine builders. That notably includes United Technologies (NYSE:UTX) unit Pratt & Whitney, which has taken market share in recent years.Meanwhile, the merger of UTX and Raytheon (NYSE:RTN) potentially creates a more formidable competitor on the defense/military side as well. And the delays of GE's new GE9x turbine engine hampered Boeing's launch of its 777x. After that news, and with its competition improving, GE Aviation needed a strong showing - and got it.Right? General Electric Stock Stays StuckPerhaps. But GE stock bears weren't so sure and apparently, neither were investors. Even as stock markets raced to all-time highs, the lid stayed on GE stock.And two noted skeptics cast doubt on the headline. Stephen Tusa, who has been a prescient bear on GE stock for years now, went as far as to call the order figure "a smoke screen." He argued that new engines - including the GE9x and the LEAP, the latter of which is manufactured in a joint venture with Safran SA (OTCMKTS:SAFRY) - might not be as profitable as GE's past models.John Inch of Gordon Haskett seemed to agree. Both analysts argued that the unit's 2018 earnings - and remember, 2018 was a disastrous year for GE as a whole - were likely above its long-term averages. As a result, Tusa argued that GE Aviation was worth potentially less than $40 billion, with Inch citing a $50 billion ceiling.Of course, as Barron's noted, other analysts saw it differently. Both Citigroup and Barclays saw the order growth as impressive. Those analysts are among the bulls who value GE Aviation in the range of $80 billion -$100 billion.Those differing valuations have an enormous impact on GE stock. What Aviation Means for GE StockWhat seems to be a $30 billion-$60 billion discrepancy on Aviation's valuation leads to very different views on GE stock. On its own, that range suggests a $3.40-$6.80 per share impact to a "sum of the parts" model.But that's not the only impact. Again, GE has a huge amount of debt. A stronger Aviation business will produce more cash flow that can be used to pay down that debt. It also gives GE more ways to raise money; a spin-off or partial sale of the unit can be used to raise capital, for instance.A weaker Aviation business, however, leaves GE in something close to trouble. The Power business still is a mess. GE Healthcare's profits are coming down after the company sold GE Biopharma to Danaher (NYSE:DHR) for $21 billion. Aviation matters not just in terms of paper valuation; it has to drive much of the growth and cash flow that GE needs to create.The importance of Aviation can be seen in the relative price targets of the four analysts, as Barron's pointed out. Tusa and Inch value General Electric stock at $5 and $7, respectively. Barclays sees GE stock getting to $13, and Citigroup estimates that GE stock is worth $14 per share. On the SidelinesA weaker Aviation business would be bad news for GE stock. I argued last year in a detailed analysis that GE, in a breakup, likely was worth at most $14-$16 per share. Including the costs of a breakup, its value is something closer to $9-$11. That was based on an estimated valuation of Aviation, using its 2017 results, of nearly $100 billion.Not all that much has changed since then, though the arrival of new CEO Larry Culp has sparked optimism towards the company's future. But if Aviation "really" is a $50 billion or a $70 billion business, it gets tougher to argue that GE stock can rise. And given that I'm skeptical that the 737 MAX issues - which already are expected to hit GE's cash flow by $200-$300 million - will be resolved soon, I'm not expecting investors' sentiment towards the unit to improve much as the year goes on.As I've written before, I'm rooting for GE stock. It's an iconic American company, and I'd love for long-suffering shareholders to see a rebound.But its problems are real. Its current collection of businesses isn't all that attractive anymore. General Electric stock needs Aviation to be a big winner - and if there are any signs at all that it won't be, it gets very difficult to pound the table for GE stock.As of this writing, Vince Martin has no positions in any securities mentioned. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Stocks Top Investors Are Buying Now * The 10 Best Cryptocurrencies to Keep on Your Radar * 7 Marijuana Penny Stocks That Could Triple (But You Won't Make Money) The post Aviation Is the Rope in the Tug of War Over GE Stock appeared first on InvestorPlace.
- Reuters•3 days ago
Buyout firm Arcline Investment to buy Baker Hughes unit
Arcline Investment Management, a U.S. private equity firm founded by former Golden Gate dealmaker Rajeev Amara, said on Thursday it would buy a unit of Baker Hughes, General Electric Co's oil-servicing subsidiary. The deal comes after Arcline said in March it had raised $1.5 billion for a fund targeted at buying small to midsize industrial businesses, which the company defines as companies with less than $1 billion in revenue. Arcline has agreed to acquire Baker Hughes' reciprocating comprehension division, which makes and services industrial engines and compressors built into natural gas pipelines operated by oil and gas companies.
- Investor's Business Daily•3 days ago
Is GE Stock A Buy Right Now? Here's What Earnings, Chart Say
General Electric is making major changes after a brutal couple of years. Here is what the fundamentals and technical analysis say about buying GE stock now.
- Zacks•3 days ago
Danaher (DHR) Beats on Q2 Earnings and Sales, Ups Guidance
Danaher's (DHR) second-quarter 2019 results benefit from growth in organic sales, acquired assets and DBS initiatives. Furthermore, the company raises its projection for the current year.
- Zacks•3 days ago
Honeywell (HON) Q2 Earnings Beat Estimates, Revenues Miss
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- InvestorPlace•3 days ago
The Big Comeback for GE Stock Is Going to Keep Stalling
Long-beleaguered shares of General Electric (NYSE:GE) would have to climb less than one dollar for nearly everything, including the rhetoric surrounding GE stock, to change for the better. But, in football parlance, that last few inches to a first down may as well be forty yards. Falling short is falling short. Click to Enlarge Source: Shutterstock And analysts aren't helping.On the verge of a breakout, UBS analyst Damian Karas lowered his stance on General Electric stock this week, from a "Buy" to "Neutral." Karas believes the 40% rebound from the late-2018 low is about as much as GE stock is capable of rallying right now, without more progress on the cash flow front. The analyst is also suspicious of the company's power arm, which has proven to be dead weight for years.InvestorPlace - Stock Market News, Stock Advice & Trading TipsHe may be right. But, the right nudge could readily change not just how the market interprets information about General Electric, but change the criteria being used to judge GE. * 7 Stocks Top Investors Are Buying Now GE Stock and the Failing ComebackIt's an idea that's been posed before, but merits repeating. General Electric shares aren't a typical equity at this time. They're a psychological chess match.Players are aiming to figure out how other players will feel about the most plausible headlines anywhere from six weeks to six months from now, including the potential sale of assets like last year's sale of its locomotive business to Wabtec (NYSE:WAB), or this year's planned sale of its life sciences division to Danaher (NYSE:DHR).Everyone's playing the game too, including the media, and including analysts. Most don't know they're playing the game, but 'being right' about General Electric would be a nice feather in someone's career cap.To that end, the chart's been largely leading the rhetoric, rather than the other way around. It's arguable that UBS' Karas would have remained bullish and raised his target had GE stock started July as bullishly as it ended June. The downgrade didn't take shape until General Electric shares had decidedly stalled.That chart, however, is still oh-so-close to the technical breakout that could serve as a paradigm shift.There are actually two lines in the sand to watch. One of them, $10.53, where GE shares peaked several times since February. It's plotted in red on the daily chart.The other is $10.73, marked as a blue dashed line on the image. That's where General Electric shares peaked a couple of times late last month. GE stock actually traded above levels in late February, but the two aforementioned lines have been highs multiple times.Though unable to clear either ceiling yet, that's the direction things are moving. GE has made a string of higher lows since the end of last year, and that effort is relatively well organized. That is, the key lows are lined up, creating a technical floor that's likely to halt any pullback. That floor is marked as a yellow dashed line.The shape of the chart itself, however, is bullish.The converging support and resistance lines are squeezing GE stock into the tip of a wedge pattern bullishly, building up pressure the entire time. If-and-when General Electric is finally forced out of the confines of the wedge, traders could make up for lost time.If that break is pointed upward, look for a slew of upgrades. Look for the headlines to suddenly change their tone and timbre. Look for cash flow to matter just a little less. Looking Ahead for GE stockDespite a handful of respectable efforts, General Electric are having trouble with a tough ceiling.Still, it's noteworthy that Karas' newest ho-hum opinion of GE came with a clear escape plan:"We expect new management to make the right decisions, which will take time…Much of the risk is now priced in and we think the stock will take a breather on a relative basis until we get more clarity on individual assets. In particular, we flag Power, which hardly contributes to GE's equity value today but we think could dominate sentiment into 2020."He's absolutely right in that regard -- sentiment remains the key.As of this writing, James Brumley did not hold a position in any of the aforementioned securities. You can learn more about him at his website jamesbrumley.com, or follow him on Twitter, at @jbrumley. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Stocks Top Investors Are Buying Now * The 10 Best Cryptocurrencies to Keep on Your Radar * 7 Marijuana Penny Stocks That Could Triple (But You Won't Make Money) The post The Big Comeback for GE Stock Is Going to Keep Stalling appeared first on InvestorPlace.
- Moody's•4 days ago
YPF Energia Electrica S.A. -- Moody's assigns a B2 rating to YPFEE's up to $500 million senior unsecured notes; negative outlook
Moody's Investors Service ("Moody's") has assigned today a B2 rating to YPF Energía Eléctrica S.A. (YPFEE) planned note issuance of up to $500 million under its medium term note program. The notes will have a 7-year maturity and YPFEE will use the proceeds to partially fund its investment program, repay outstanding debt and working capital needs. Moody's has reviewed the preliminary draft legal documentation related to the debt issuance.
- InvestorPlace•4 days ago
The Outlook of GE Stock Remains Positive
General Electric (NYSE:GE) stock fell modestly on Monday after UBS downgraded GE stock. This comes on the heels of Stephen Tusa at JPMorgan Chase (NYSE:JPM) reiterating his bearish $5 per share target on GE stock. It's true that GE is facing issues at its Power and Aviation units and may have some self-inflicted wounds.Source: Shutterstock UBS lowered its price target on GE stock to $11.50, but that's well above the current $10-plus per share level where GE stock currently trades. UBS believes that General Electric stock will "take a breather," rather than fall to JPMorgan's price target. Still, despite concerns, the speculative buy case on GE appears to still be valid. * 8 Penny Stocks That Have Fallen From Grace UBS analyst Damian Karas cited a "notable decline in interest rates and ongoing power market weakness" as reasons for the downgrade of GE stock. However, Karas went on to say that he thinks the company is on the road to a "multi-year turnaround."InvestorPlace - Stock Market News, Stock Advice & Trading Tips GE Stock Remains SpeculativeThis downgrade highlights the point that CEO Larry Culp and General Electric stock bulls have pointed out: GE is in the midst of a multi-year turnaround. Investors should not expect GE stock to return to its $600 billion market cap. Nor should they expect it to regain its place on the Dow 30 anytime soon. The journey from the world's largest market cap to the near-destruction of the company took years. By the same token, nobody can expect GE to recover overnight.InvestorPlace columnist Vince Martin noted many of the setbacks GE has faced, including "confusion" about the growth of the orders received by its Power unit. Moreover, GE Aviation, often regarded as one of the company's more stable divisions, has faced issues with its GE9X aircraft engine.Further, the U.S.-China trade war and the possibility that toxic assets remain on the balance sheet of GE Capital remain on the minds of some investors. One only has to study the history of Pan American World Airways or Enron to know that once-respected large companies can disappear, so the owners of General Electric stock are facing considerable risk. The UBS Downgrade Changes Almost NothingHowever, I do not think the buy case has changed for General Electric stock since the start of the year. It remains a speculative stock. I do not believe any of its known challenges will derail its recovery.But investors do need to consider that GE has risen by around 38% since the start of the year, so a pause or pullback wouldn't be very surprising.Still, if GE does recover, the owners of General Electric stock would make a great deal of money. As a result, speculating on GE stock could be worthwhile. As recently as two and a half years ago, GE traded at triple the price at which it stands today. Moreover, analysts, on average, expect the company's earnings to resume rising in fiscal 2020. They also believe that its profit will increase at least 10% annually from fiscal 2020 through 2022. Assuming the company can maintain that growth rate for the foreseeable future, the price of General Electric stock would probably rise meaningfully. GE Stock Remains a Speculative BuyAmid the news, I still see GE stock as a speculative buy. Neither the UBS downgrade nor the continued $5 per share price target from JPMorgan's Tusa has brought GE stock down recently. Moreover, the forward price-earnings (PE) ratio of General Electric stock now stands at just above 14. I consider that a low multiple for a company that looks set to experience double-digit-percentage profit growth.GE could fall significantly if the worst fears about it come true or if the major indexes enter a bear market. However, as long as GE's profit rebounds and its setbacks seem manageable, General Electric stock still looks to be on the path to recovery.As of this writing, Will Healy did not hold a position in any of the aforementioned stocks. You can follow Will on Twitter at @HealyWriting. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 9 Retail Stocks Goldman Sachs Says Are Ready to Rip * 7 Services Stocks to Buy for the Rest of 2019 * 6 Stocks to Buy and 1 to Sell Based on Insider Trading The post The Outlook of GE Stock Remains Positive appeared first on InvestorPlace.
- InvestorPlace•4 days ago
Why $70 Looks Like a Floor for Exxon Stock
From a capital appreciation standpoint, Exxon Mobil (NYSE:XOM) stock has been a disappointment. Over the last decade, the XOM stock price has gained 12.5%. During that period, Exxon Mobil stock has badly lagged the S&P 500, which has returned a sizzling 223%.Source: Shutterstock But for investors focused on income, XOM actually hasn't been a terrible play. Exxon Mobil's dividends have more than doubled from a total of $1.66 per share in 2009 to what should be $3.48 in 2019. Investors' total return from Exxon Mobil stock has averaged 4.3% per year. * 8 Penny Stocks That Have Fallen From Grace That's still disappointing, since the S&P 500 has returned almost 15% annually, including dividends. But it's not terrible in an environment in which U.S. Treasuries have yielded less than 3% most of the time.InvestorPlace - Stock Market News, Stock Advice & Trading TipsWe're still in that environment, with the 10-year Treasury yielding just 2.1%.It's true that buying a stock just for its yield can be very dangerous, as previous income darlings like General Electric (NYSE:GE), Kraft Heinz (NASDAQ:KHC), and Anheuser-Busch InBev (NYSE:BUD) all have cut their dividends recently.But Exxon Mobil doesn't have the debt problem those companies did (and still do) have. And while XOM stock has exposure to crude oil prices, it also uses a hedge to protect its profits. As a result, XOM stock price probably won't fall below $70 for long. And that makes XOM stock, currently at $75.50, an interesting play for income-focused investors in general and value-oriented, income-focused investors in particular. Why $70 Is a Key Level for XOM Stock PriceXOM hiked its quarterly dividend to $0.87 in May. That, in turn, suggests that investors are receiving $3.48 per share of XOM stock annually. And so, if the XOM stock price reaches $69.60, the stock would offer a yield of exactly 5%.It's difficult to see Exxon Mobil stock consistently yielding more than 5% for a few reasons. First, that type of yield is noticeable and usually not offered by relatively safe stocks. Of the Dow Jones Industrial Average stocks, only Dow (NYSE:DOW) and IBM (NYSE:IBM) offer higher yields. Both companies have real challenges (Dow is facing cyclical pressure and IBM has long-running growth problems).In the S&P 500, there are 35 components with higher yields. All have warts, among them AT&T (NYSE:T) and its debt load and Altria (NYSE:MO) which is facing concerns about long-term demand for its products.The second reason is that, historically, XOM stock has hardly ever yielded 5%. Its yield peaked at 5.5% during the 1987 market crash and touched 5% a few times through the early 1990s.But that was a very dark time in the crude oil markets, which had crashed after their early 1980s boom. Meanwhile, interest rates were much, much higher; investors could get 7% to 9% yields from10-year Treasuries.Without that alternative, a 5% yield from XOM stock is going to look very attractive. Indeed, in late May, as XOM and other oil stocks sold off, XOM stock bottomed just above $70. A bounce in crude prices helped, but it's likely that at least some investors saw the yield nearing 5% and pounced. Exxon Mobil Stock Is Safer Than It AppearsOf course, the question is whether Exxon Mobil stock really is safe. A 5% yield - or even a 4% yield - is attractive in this market. But what happens when crude prices plunge?The answer is that XOM's earnings will decline, but in a mostly manageable fashion. As I've written before, Exxon Mobil's "downstream'" operations - notably in refining - and its chemicals business provide an internal hedge. That's why XOM stock actually is a poor play on oil prices. But it's also why XOM stock didn't fall that far when the shale bust hit in 2016 - and why the company was relatively unscathed during the fourth quarter of 2018, which was disastrous for many oil and gas companies.If oil prices rise, XOM's upstream business will thrive and its downstream business will take a hit. When oil prices fall, the reverse is (usually) true. Despite this hedge, the XOM stock price is boosted by higher crude prices, as seen in 2014 when XOM stock hit an all-time high. But even amid a plunge in prices two years later, Exxon Mobil's dividend continued to rise,.XOM stock isn't risk-free. But Exxon's earnings easily cover the current dividend of XOM stock. The odds of XOM executing a GE-style dividend cut are slim, even with crude and natural gas prices relatively low. And this is an environment where, as I noted just last week, investors usually have to stretch for yield. If XOM is yielding 5% and 10-year Treasuries have a 2.1% yield, many investors are going to buy XOM stock. The TradeFor income investors, then, XOM looks reasonably attractive at $75.50. Its valuation is reasonable, at 14.4 times analysts' average forward earnings estimate. And XOM still looks poised to deliver further growth, as its CEO, Darren Wood, last year set a target of doubling the company's earnings by 2025.For traders, there's an intriguing option trade to be made as well. A bull put spread at $70 (selling the $70 put and buying a lower-priced put for protection) can offer double-digit returns or better, depending on the expiration date. That's essentially a bet that the XOM stock price won't be under $70 at expiration, which seems a nice bet to make at the moment.But there are some risks facing XOM stock at the moment. The U.S. presidential election could pressure XOM stock if a "green" Democrat was to win or even starts to gain momentum. A plunge in oil prices is another risk: Exxon Mobil does have hedges, but XOM stock still fell when crude collapsed in 2016.But there's risk everywhere when the market is at all-time highs, particularly for income investors. Getting a 4%+ yield from Exxon Mobil stock is one of the better risk-reward options out there at the moment. And that's precisely the point: investors aren't going to let a yield above 4% last for long. XOM stock isn't going to be the biggest gainer in the market over the next six months or the next three years. But, at the right price, it's an attractive dividend play.As of this writing, Vince Martin has no positions in any securities mentioned. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 9 Retail Stocks Goldman Sachs Says Are Ready to Rip * 7 Services Stocks to Buy for the Rest of 2019 * 6 Stocks to Buy and 1 to Sell Based on Insider Trading The post Why $70 Looks Like a Floor for Exxon Stock appeared first on InvestorPlace.
- Investing.com•4 days ago
General Electric Falls 3%
Investing.com - General Electric (NYSE:GE) fell by 3.03% to trade at $10.06 by 15:24 (19:24 GMT) on Wednesday on the NYSE exchange.
- Bloomberg•4 days ago
GE Sells Solar-Business Stake to BlackRock
(Bloomberg) -- General Electric Co. agreed to sell a majority stake in a solar-energy business to BlackRock Inc., giving the investment giant footing in a growing market as the ailing manufacturer shifts its focus elsewhere.A fund managed by BlackRock’s Real Assets unit will own 80% of Distributed Solar Development, a new company created from GE Solar, the companies said Wednesday in a statement. Financial terms weren’t disclosed.The deal furthers GE’s streamlining as Chief Executive Officer Larry Culp seeks to rescue the conglomerate by narrowing focus around aviation, gas power and wind energy. The Boston-based company is using mergers to exit the oil and locomotive markets, and GE has said it is “evaluating strategic options” for its venture-capital operations.GE Solar, a consulting business with about 60 employees, has been incubated within GE since 2012. The unit, which doesn’t make solar panels, focuses on “solar and storage solutions for the commercial industrial and public sectors.” GE had explored solar-panel manufacturing but sold its technology to First Solar Inc. in 2013.GE fell 1.5% to $10.23 at 10:42 a.m. in New York, while BlackRock slid 1.5% to $470.13.Once RiskyBlackRock’s Real Assets unit, which has more than $50 billion in client commitments, started its renewable-power platform in 2012. The GE deal comes as investors begin prioritizing a solar segment that was once viewed as riskier than developments for utilities or homeowners: projects for commercial and industrial customers.Part of the impetus is money, as smaller solar farms offer returns that can be more than 2% higher than big projects.It’s also a matter of availability and supply. Large institutional investors have dominated recent auctions for utility-scale developments, crowding out other would-be buyers. And states including California have committed to rid their grids of emissions, encouraging more renewables developments.To contact the reporters on this story: Richard Clough in New York at rclough9@bloomberg.net;Brian Eckhouse in New York at beckhouse@bloomberg.netTo contact the editors responsible for this story: Brendan Case at bcase4@bloomberg.net, Tony RobinsonFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Motley Fool•5 days ago
Forget GE -- This Restructuring Industrial Giant Is a Better Buy
GE is working from a position of weakness. Most investors would be better off looking at Eaton, which is working from a position of strength.
- American City Business Journals•5 days ago
Survey: Many doctors untrained, unwilling to treat opioid addiction
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- InvestorPlace•5 days ago
Why GE Stock Is Stuck In Neutral
One of the stock market's surprising stars in early 2019 was beaten up industrial conglomerate General Electric (NYSE:GE). GE stock rose from $7 in late 2018, to $10 by early February 2019, as investors took a favorable view on management's aggressive moves to turn the struggling business around.Source: Shutterstock Specifically, in early 2019, management divested multiple non-core assets and businesses, simplified the business model, raised cash, reduced leverages, and narrowed the company focus to related businesses with stable long-term growth prospects. The sum of these moves gave investors confidence that GE was in the early stages of turning into a smaller, but better and more valuable company in the long haul. GE stock rallied in response.But, that rally has been on pause over the past few months. From early February through mid-July, GE stock has been stuck in neutral, bouncing around the $10 range, while the S&P 500 has risen more than 10%.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 9 Retail Stocks Goldman Sachs Says Are Ready to Rip Why has GE stock gone from out-performer to under-performer over the past few months? More importantly, will this under-performance persist?Let's take a deeper look. Lack of Clarity Has Short-Circuited GE Stock RallyIn the big picture, a lack of clarity regarding GE's long-term growth prospects short-circuited the big early 2019 rally in GE sock.In early 2019, General Electric was taking consistent steps towards laying the groundwork for healthier future growth prospects. Most of those steps were centered around non-core asset and business divestitures, which allowed for leverage reduction and more optimal resource allocation. But, such asset and business divestitures have stopped happening over the past few months.In the absence of these divestitures, investors have started to ask questions. Which businesses will remain after all this shedding is done? How big will GE be at that point in time? What will the growth prospects be like? Will the company successfully reduce its leverage? How long will this whole process take?None of these questions have clear answers. This divergence between a lot of questions and few answers has created a significant lack of clarity when it comes to GE's long-term growth prospects. It turns investor optimism into investor caution, which turns a GE stock rally into a sideways trading pattern.That's exactly what has happened to GE stock over the past few months. Lack of Clarity Will Continue to Weigh on General Electric StockUnfortunately for bulls, this lack of clarity will persist for the foreseeable future, and it will likely keep GE stock stuck in neutral.The reality of the GE turnaround is that -- because the business is so big and complex with a lot of moving parts -- the simplification process will take time. As such, lack of clarity will be inherent to the GE growth narrative for the foreseeable future.On top of that, global economic growth trends remain sluggish, with the manufacturing sector posting decade-worst growth and heading into a potential recession in 2020. GE has a ton of exposure to the manufacturing sector. Bad fundamentals there is bad news for General Electric stock.Further, Wall Street has become increasingly cautious on GE stock. According to YCharts, despite the 2019 rally, the sell-side consensus price target for GE stock has actually dropped year-to-date. One could very reasonably argue that the 2019 rally was brought on by undervaluation (GE stock was 30% below the consensus price target in January), and that such undervaluation no longer exists (GE stock is only 10% below the consensus price target today, roughly the same divergence it has had over the past five years).Broadly, then, current fundamentals imply that GE stock will remain in neutral for the foreseeable future. Bottom Line on GE StockI have faith that GE will downsize around its aviation business, and create a "new GE" within the next five years that is far healthier and more profitable than the GE of today. But, the jump from today to that future requires a leap of faith which investors aren't willing to take just yet.They won't be willing to take that leap until clarity emerges regarding what this company will look like in five years. Until that happens, the best way to play GE stock is by watching it from the sidelines.As of this writing, Luke Lango did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 9 Retail Stocks Goldman Sachs Says Are Ready to Rip * 7 Services Stocks to Buy for the Rest of 2019 * 6 Stocks to Buy and 1 to Sell Based on Insider Trading The post Why GE Stock Is Stuck In Neutral appeared first on InvestorPlace.
- MarketWatch•5 days ago
GE loses a bull, and stock falls
Shares of General Electric Co. dropped Monday, after UBS backed away from its bullish stance, citing significant outperformance in the face of continued power market weakness and a significant decline in interest rates.
- MoneyShow•5 days ago
General Electric GE- 2019 Top Picks' Mid-Year Update
George Putnam, editor of The Turnaround Letter, picked General Electric (GE) as his favorite investment idea for 2019. The stock has since risen 44%. Here's the latest update from the leading turnaround specialist.
- Investopedia•5 days ago
How 2Q Guidance Could Hammer The Bull Market
Corporate profits for 2Q 2019 are expected to be weak, and a growing number of CEOs and other top executives are offering negative guidance.
- Motley Fool•5 days ago
Why Investors Should Want Jeff Immelt on Twilio's Board
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- Zacks•6 days ago
General Electric (GE) Stock Sinks As Market Gains: What You Should Know
General Electric (GE) closed at $10.27 in the latest trading session, marking a -0.96% move from the prior day.
- Investor's Business Daily•6 days ago
GE's Weakest Link May Soon 'Dominate Sentiment' Amid Turnaround: UBS
Analysts at UBS see the General Electric narrative shifting from survival to a multiyear turnaround, though they downgraded GE stock on valuation concerns.
- Reuters•6 days ago
US STOCKS-Wall Street treads water as Citi results pressure bank shares
Wall Street's three main indexes flitted between slight gains and losses on Monday, as declines in Boeing and bank stocks after Citigroup's quarterly report were countered by a rise in technology shares. The third-largest U.S. lender beat profit estimates but reported a decline in interest margins, with its shares marginally lower in volatile trading. The sequential squeeze on Citi's net interest margins by 5 basis points is a cause for worry for investors in other large banks, said Marty Mosby, director of bank and equity strategies at Vining Sparks in Memphis, Tennessee.
- Barrons.com•6 days ago
GE Stock Loses a Bull as UBS ‘Takes a Breather’
UBS downgraded General Electric stock to Neutral and cut its price target citing recent stock gains and lingering concerns over competition.
