We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Here's Why You Should Give General Electric (GE) a Shot Now
Read MoreHide Full Article
General Electric (GE - Free Report) is thriving on the back of strong performance of the Aerospace segment. Recovery in the Power and Renewable Energy segments augurs well for the company. GE’s commitment to return value to shareholders through dividends and share buybacks is encouraging.
Let’s delve deeper to unearth the factors that make investing in this Zacks Rank #2 (Buy) company a smart choice now.
Aerospace Segment Strength: The Aerospace segment is benefiting from robust demand and solid execution in commercial engines and services. The segment’s revenues and orders jumped 26% and 28% year over year in the first nine months of 2023, respectively. GE expects Aerospace revenues (organic) to increase in low 20% for 2023. It estimates a profit of $1.2-$1.3 billion for the unit in 2023.
In March 2023, the company provided a bullish long-term view for the Aerospace segment. For 2025, the company expects the segment’s revenues to increase in the low double digits to mid-teens. For the long term, General Electric predicts mid-single to high-single-digit revenue growth for the Aerospace segment. It expects continued margin expansion for the unit over the long term.
Recovery in Power and Renewable Energy Segments: Strength in GE Gas Power’s heavy-duty gas turbines is aiding the Power segment. The company expects low single-digit organic revenue growth for the Power segment in 2023 driven by Gas Power services. The acquisition of Nexus Controls (April 2023), which allows the creation of a single, full-service controls business line for further development of GE’s proprietary Mark Vle controls systems platform, should bolster the segment’s growth. The acquisition is aligned with GE’s commitment to invest in leading controls technology and expertise to enhance customer experience.
With higher equipment demand at Grid and Onshore Wind in North America, signs of progress in the Renewables segment are encouraging. For 2023, the company expects GE Renewable Energy organic revenues to increase in low double-digits. GE expects GE Vernova (the combined operations of GE Power and Renewable) to be profitable in 2024 with a mid-single-digit profit margin. Over the long term, the company expects mid-single-digit revenue growth for the division and a high-single-digit profit margin. In August 2023, GE Vernova’s Digital business acquired data integration platform company, Greenbird Integration Technology AS, as it aims to accelerate the sustainable energy grid. The buyout facilitates GridOS, the first software portfolio designed for grid orchestration, by adding new capabilities for connecting systems and integrating data across the grid smoothly.
Improved Guidance: Given continued strength in GE Aerospace and improvement in GE Vernova, General Electric has raised its full-year guidance. The company now expects revenues to increase in the low teens compared with the low double digits anticipated earlier. It expects adjusted earnings of $2.55-$2.65 per share compared with $2.10-$2.30 anticipated earlier. GE expects an operating profit of $5.2-$5.5 billion compared with $4.7-$5.1 billion estimated earlier. It expects free cash flow of $4.7-$5.1 billion compared with $4.1-$4.6 billion predicted earlier.
Rewards to Shareholders: General Electric’s commitment to reward its shareholders through dividends and share buybacks is encouraging. In the first nine months of 2023, GE bought back 8.4 million shares for $800 million under a $3 billion buyback program, which was approved in March 2022. In the same period, the company paid dividends of $501 million to its shareholders.
Northbound Estimate Revision: The Zacks Consensus Estimate for General Electric’s 2023 and 2024 earnings has been revised upward by 15.7% and 4.7% in the past 60 days, respectively.
Other Stocks to Consider
Below, we discuss some other top-ranked stocks from the Industrial Products sector:
Applied Industrial has an estimated earnings growth rate of 5.8% for the current fiscal year. Shares of the company have rallied 25.1% in the year-to-date period.
A. O. Smith Corporation (AOS - Free Report) presently carries a Zacks Rank #2. The company delivered a trailing four-quarter earnings surprise of 14%, on average.
A. O. Smith has an estimated earnings growth rate of 19.4% for the current year. Shares of the company have gained 24.2% in the year-to-date period.
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Here's Why You Should Give General Electric (GE) a Shot Now
General Electric (GE - Free Report) is thriving on the back of strong performance of the Aerospace segment. Recovery in the Power and Renewable Energy segments augurs well for the company. GE’s commitment to return value to shareholders through dividends and share buybacks is encouraging.
Let’s delve deeper to unearth the factors that make investing in this Zacks Rank #2 (Buy) company a smart choice now.
Aerospace Segment Strength: The Aerospace segment is benefiting from robust demand and solid execution in commercial engines and services. The segment’s revenues and orders jumped 26% and 28% year over year in the first nine months of 2023, respectively. GE expects Aerospace revenues (organic) to increase in low 20% for 2023. It estimates a profit of $1.2-$1.3 billion for the unit in 2023.
General Electric Company Price and Consensus
General Electric Company price-consensus-chart | General Electric Company Quote
In March 2023, the company provided a bullish long-term view for the Aerospace segment. For 2025, the company expects the segment’s revenues to increase in the low double digits to mid-teens. For the long term, General Electric predicts mid-single to high-single-digit revenue growth for the Aerospace segment. It expects continued margin expansion for the unit over the long term.
Recovery in Power and Renewable Energy Segments: Strength in GE Gas Power’s heavy-duty gas turbines is aiding the Power segment. The company expects low single-digit organic revenue growth for the Power segment in 2023 driven by Gas Power services. The acquisition of Nexus Controls (April 2023), which allows the creation of a single, full-service controls business line for further development of GE’s proprietary Mark Vle controls systems platform, should bolster the segment’s growth. The acquisition is aligned with GE’s commitment to invest in leading controls technology and expertise to enhance customer experience.
With higher equipment demand at Grid and Onshore Wind in North America, signs of progress in the Renewables segment are encouraging. For 2023, the company expects GE Renewable Energy organic revenues to increase in low double-digits. GE expects GE Vernova (the combined operations of GE Power and Renewable) to be profitable in 2024 with a mid-single-digit profit margin. Over the long term, the company expects mid-single-digit revenue growth for the division and a high-single-digit profit margin. In August 2023, GE Vernova’s Digital business acquired data integration platform company, Greenbird Integration Technology AS, as it aims to accelerate the sustainable energy grid. The buyout facilitates GridOS, the first software portfolio designed for grid orchestration, by adding new capabilities for connecting systems and integrating data across the grid smoothly.
Improved Guidance: Given continued strength in GE Aerospace and improvement in GE Vernova, General Electric has raised its full-year guidance. The company now expects revenues to increase in the low teens compared with the low double digits anticipated earlier. It expects adjusted earnings of $2.55-$2.65 per share compared with $2.10-$2.30 anticipated earlier. GE expects an operating profit of $5.2-$5.5 billion compared with $4.7-$5.1 billion estimated earlier. It expects free cash flow of $4.7-$5.1 billion compared with $4.1-$4.6 billion predicted earlier.
Rewards to Shareholders: General Electric’s commitment to reward its shareholders through dividends and share buybacks is encouraging. In the first nine months of 2023, GE bought back 8.4 million shares for $800 million under a $3 billion buyback program, which was approved in March 2022. In the same period, the company paid dividends of $501 million to its shareholders.
Northbound Estimate Revision: The Zacks Consensus Estimate for General Electric’s 2023 and 2024 earnings has been revised upward by 15.7% and 4.7% in the past 60 days, respectively.
Other Stocks to Consider
Below, we discuss some other top-ranked stocks from the Industrial Products sector:
Applied Industrial Technologies (AIT - Free Report) presently carries a Zacks Rank #2. The company pulled off a trailing four-quarter earnings surprise of 13.8%, on average. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Applied Industrial has an estimated earnings growth rate of 5.8% for the current fiscal year. Shares of the company have rallied 25.1% in the year-to-date period.
A. O. Smith Corporation (AOS - Free Report) presently carries a Zacks Rank #2. The company delivered a trailing four-quarter earnings surprise of 14%, on average.
A. O. Smith has an estimated earnings growth rate of 19.4% for the current year. Shares of the company have gained 24.2% in the year-to-date period.