GE Stock Forecast: Is It a Buy Right Now?
For this GE stock forecast, let’s start from the top. General Electric (NYSE: GE) is a multinational conglomerate that’s in many industries. Founded in 1892, GE is one of America’s oldest companies still in existence today. In fact, the company was originally created to bring Thomas Edison’s lighting businesses under one roof. Hence the name: General Electric.
GE was first called Edison General Electric Company before being later renamed General Electric. Of course, lighting was a novel concept in Edison’s day. But now that it is more of a commodity, GE’s business is much broader. It has business in many sectors, including aviation, renewable energy, weapons manufacturing, locomotives, venture capital and more.
GE might be one of America’s older businesses, but in reality, that says nothing about whether GE stock is a good buy today. Given that it operates in so many sectors now, its business is always changing, so we must look at the current GE stock forecast to see whether it’s worth buying.
What is GE?
General Electric is an enormous company. It was ranked within the top 50 of Fortune 500’s largest companies. Indeed, this company stopped being about just lightbulbs long ago. The company is based in Boston, Massachusetts, but it has locations in 130 countries. Perhaps needless to say, GE also employs a large number of people; it had 202,000 employees as of 2020.
GE has operated several division that no longer exist. In 2008, it had planned to auction off its appliance division, although that sale fell through. Then, in 2014, it dissolved its appliances and lighting division. It also had a transportation division that merged with Wabtec in 2019.
Today, it’s businesses include additive manufacturing, aviation, capital, healthcare, power, renewable energy, research and licensing. Understanding the entire company is useful for coming up with a better GE stock forecast.
GE Stock Forecast and Performance Outlook
GE stock did not take as big a hit as some stocks did due to COVID-19. Its share price did fall from around $100 at the beginning of 2020 to around $50 in March. Although, some other stocks saw much bigger drops. Since then, its share price has steadily climbed and is about equal to its pre-pandemic price point.
In the past six months, the stock’s price has gone up and down, fluctuating between about $105 and $95. It saw its high point in recent months at the end of October when it topped $107. At the moment, it’s at a higher point coming close to $110. This upward momentum is good to see.
Currently, many analysts of the stock show that it’s undervalued and likely to increase in price over the next 12 months. Thus, look for this stock to go up in price—though not tremendously so.
GE Quarterly Financials
GE recent quarterly earnings report for September 2021 looks encouraging. For instance, despite a slight (0.54%) decrease in revenue, its net income is up 210% year-over-year to $1.26 billion. Its EPS is up 199% to $1.08, and its profit margin is improving as well, coming in at 6.82%.
It has also increased its operating income. In fact, its operating income was negative the previous quarter, but his past quarter, it was $887 million. Plus, its net change in cash was $2.2 billion, a big increase year-over-year.
GE Earnings vs. Predictions
As far as how GE is doing compared to EPS and revenue predictions, things look great for the former and lukewarm for the latter. It has been beating EPS predictions by wide margins, and it has beat revenue predictions in two of the last four quarters. When it comes to accurate GE stock forecasts, this pattern is useful to consider.
What stands out the most among its EPS predictions Q1 2021. In that quarter, it beat its EPS projection by 242%. That being said, its EPS was only projected to be $0.07, while it recorded a $0.24 EPS. In the last two quarters, it still managed to beat EPS projections by 50% and then by 30% despite having a higher EPS than it had at the beginning of the year. Its most recent reported EPS was $0.57.
How to Buy GE Stock
GE stock might have modest gains over the next 12 months. That may not be exciting for most investors, but its diverse business model and long history give the company the sort of stability that many will appreciate.
If you want to buy GE stock, it’s easy to find on the open market. As with any stock, you have a couple of options:
- Buy shares in a brokerage account or IRA. You can buy shares of GE stock directly through your favorite online broker. Whether you want to buy shares in a brokerage account or IRA, just search General Electric or its ticker, GE and place an order.
- Buy shares in an ETF. There are many ETFs that include GE stock. In fact, there are over 150 ETFs that include it. In addition to total-market ETFs, you can buy shares in many ETFs, such as FMIL, VIS, UPRO, XLI, and plenty more.
I hope you’ve enjoyed this GE stock forecast. And it’s always important to consider the risk, as well as do your own research. This is just one of many stocks out there…
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About Bob Haegele
Bob Haegele is a personal finance writer who specializes in investing and planning for retirement. His hefty student loan burden inspired him to pay off his loans, and now he’s helping others get their finances in order. When he’s not writing, he enjoys travel and live music.