General Electric (GE) Dips More Than Broader Markets: What You Should Know

Zacks Equity Research

General Electric (GE) closed the most recent trading day at $10.29, moving -1.86% from the previous trading session. This change lagged the S&P 500's 0.17% loss on the day. Meanwhile, the Dow gained 0.03%, and the Nasdaq, a tech-heavy index, lost 0.32%.

Prior to today's trading, shares of the industrial conglomerate had gained 9.62% over the past month. This has outpaced the Conglomerates sector's gain of 2.87% and the S&P 500's gain of 3.07% in that time.

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 36.84%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $28.88 billion, down 4.07% from the year-ago period.

GE's full-year Zacks Consensus Estimates are calling for earnings of $0.61 per share and revenue of $118.47 billion. These results would represent year-over-year changes of -6.15% and -2.59%, respectively.

Investors should also note any recent changes to analyst estimates for GE. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, 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. Over the past month, the Zacks Consensus EPS estimate remained stagnant. GE is currently a Zacks Rank #2 (Buy).

Valuation is also important, so investors should note that GE has a Forward P/E ratio of 17.27 right now. For comparison, its industry has an average Forward P/E of 16.51, which means GE is trading at a premium to the group.

Also, we should mention that GE has a PEG ratio of 2.38. 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 was holding an average PEG ratio of 1.84 at yesterday's closing price.

The Diversified Operations industry is part of the Conglomerates sector. This industry currently has a Zacks Industry Rank of 85, which puts it in the top 34% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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