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General Electric (GE) Gains But Lags Market: What You Should Know

Zacks Equity Research
·3-min read

General Electric (GE) closed the most recent trading day at $7.88, moving +1.81% from the previous trading session. The stock lagged the S&P 500's daily gain of 2.62%. Elsewhere, the Dow gained 3.16%, while the tech-heavy Nasdaq added 2.06%.

Wall Street will be looking for positivity from GE as it approaches its next earnings report date. On that day, GE is projected to report earnings of -$0.12 per share, which would represent a year-over-year decline of 170.59%. Meanwhile, our latest consensus estimate is calling for revenue of $17.25 billion, down 40.16% from the prior-year quarter.

GE's full-year Zacks Consensus Estimates are calling for earnings of $0.04 per share and revenue of $79.94 billion. These results would represent year-over-year changes of -93.85% and -24.38%, respectively.

It is also important to note the 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.

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Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

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 has moved 69.16% lower. GE is holding a Zacks Rank of #3 (Hold) right now.

Digging into valuation, GE currently has a Forward P/E ratio of 187.64. Its industry sports an average Forward P/E of 20.8, so we one might conclude that GE is trading at a premium comparatively.

It is also worth noting that GE currently has a PEG ratio of 41.7. 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 3.23 as of yesterday's close.

The Diversified Operations industry is part of the Conglomerates sector. This industry currently has a Zacks Industry Rank of 220, which puts it in the bottom 14% 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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