Back to top

Image: Bigstock

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

Read MoreHide Full Article

General Electric (GE - Free Report) closed at $7.35 in the latest trading session, marking a +0.96% move from the prior day. This move outpaced the S&P 500's daily loss of 0.15%. At the same time, the Dow lost 0.32%, and the tech-heavy Nasdaq gained 0.42%.

Heading into today, shares of the industrial conglomerate had lost 20.87% over the past month, lagging the Conglomerates sector's loss of 3.38% and the S&P 500's loss of 1.1% in that time.

GE will be looking to display strength as it nears its next earnings release, which is expected to be January 23, 2019. In that report, analysts expect GE to post earnings of $0.18 per share. This would mark a year-over-year decline of 33.33%. Our most recent consensus estimate is calling for quarterly revenue of $31.85 billion, up 1.42% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $0.67 per share and revenue of $120.18 billion. These totals would mark changes of -36.19% and -1.56%, respectively, from last year.

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. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

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.

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. The Zacks Consensus EPS estimate has moved 1.2% lower within the past month. GE is currently sporting a Zacks Rank of #5 (Strong Sell).

Digging into valuation, GE currently has a Forward P/E ratio of 10.89. For comparison, its industry has an average Forward P/E of 16.61, which means GE is trading at a discount to the group.

We can also see that GE currently has a PEG ratio of 2.07. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Diversified Operations industry currently had an average PEG ratio of 1.82 as of yesterday's close.

The Diversified Operations industry is part of the Conglomerates sector. This industry currently has a Zacks Industry Rank of 103, which puts it in the top 40% 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.

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


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


GE Aerospace (GE) - free report >>

Published in