Will GE stock ever recover?
It fell 66% in 2020 but rebounded 857% in 2021, according to FactSet. In all of 2022, analysts forecast GE earnings will jump 68% as sales rebound 2%. But they now expect General Electric to surpass 2019 EPS of $5.20 only in 2024, FactSet says. Out of 22 analysts on Wall Street, 14 rate GE stock a buy.
The YTD -33% return for GE marks an underperformance with -22% returns for the broader S&P500 index. Looking at the longer term, GE stock is down 26% from levels seen in late 2019.
In power, GE believes it can grow sales at a low single-digit percentage and generate operating profit around 8% to 10%. Operating profit should be about $1.1 billion in 2022, growing to about $1.5 billion in 2023. Both numbers are a little better than Wall Street has been modeling.
General Electric has received a consensus rating of Buy. The company's average rating score is 2.85, and is based on 11 buy ratings, 2 hold ratings, and no sell ratings.
A strong recovery in air travel has bolstered demand at GE's engine business, which is the company's cash cow. The unit reported a 27% year-on-year jump in revenue in the quarter through June on the back of higher shop visits and spare part sales.
So, why is GE stock so low? To address at least the COVID part, GE has exposure in aviation, healthcare, oil, venture capital, and other hard-hit industries. The year 2020 was hard for everyone, and even analysts from founder Morgan's namesake bank say it's a risky investment for 2021.
Stock Price Forecast
The 16 analysts offering 12-month price forecasts for General Electric Co have a median target of 88.00, with a high estimate of 120.00 and a low estimate of 72.00. The median estimate represents a +16.33% increase from the last price of 75.65.
What happens to my shares? At a ratio of 1-for-8, every 8 shares of GE common stock will be automatically combined into 1 share and the stock price is expected to initially increase proportionately.
The all-time high General Electric stock closing price was 480.00 on August 28, 2000. The General Electric 52-week high stock price is 116.17, which is 57.2% above the current share price. The General Electric 52-week low stock price is 59.93, which is 18.9% below the current share price.
Twenty years later, we can see clearly that the Manager of the 20th century was not Welch but Alfred P. Sloan, CEO and then Chairman of General Motors (1920-1963). Welch's main achievement was destroying the management model that Sloan had built, causing GE's subsequent near-collapse.
Is GE a good stock to buy 2022?
Is GE undervalued? On a brighter note, the sell-off in the stock means GE now trades at a market cap of just $82.5 billion. Even if it only hits the low end of the free-cash-flow (FCF) 2022 guidance range of $5.5 billion to $6.5 billion, the stock will trade at just 15 times FCF in 2022.
GE's decline accelerated during the Great Recession, as the financial crisis revealed it to be overstretched. In 2018, GE—the last original component of the DJIA—was dropped from the index, after years of poor performance and declining revenues.
GE, priced at around $102 a share on Wednesday, will spin off into three separate businesses: energy, aviation and health care. Johnson & Johnson, trading at $163, will divide into one consumer company and another for pharmaceuticals.
GE will become separate, publicly traded companies for its aviation, healthcare and energy businesses. The company said it hopes to spin off the healthcare business to shareholders in early 2023 and that the separation of its renewable energy and power business will occur in early 2024.
General Electric shares fell after the company reported better-than-expected fourth-quarter earnings and cash flow, while sales missed expectations.
It's not a misprint, your General Electric Co. stock is now trading above $100. That's because the one-for-eight reverse stock split the industrial conglomerate company proposed in March just took effect.
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Momentum Scorecard. More Info.
| Zacks Rank | Definition | Annualized Return |
|---|---|---|
| 1 | Strong Buy | 24.75% |
| 2 | Buy | 18.15% |
| 3 | Hold | 9.70% |
| 4 | Sell | 5.35% |
If you want to sell your shares of GE stock, please contact GE's current transfer agent, Equiniti Trust Company (EQ). Note that sales are subject to a fee of $10 per transaction plus $0.15 per share sold.
Out of 5 analysts, 3 (60%) are recommending RTX as a Strong Buy, 1 (20%) are recommending RTX as a Buy, 1 (20%) are recommending RTX as a Hold, 0 (0%) are recommending RTX as a Sell, and 0 (0%) are recommending RTX as a Strong Sell. If you're new to stock investing, here's how to buy Raytheon Technologies stock.
It fell 66% in 2020 but rebounded 857% in 2021, according to FactSet. In all of 2022, analysts forecast GE earnings will jump 68% as sales rebound 2%. But they now expect General Electric to surpass 2019 EPS of $5.20 only in 2024, FactSet says. Out of 22 analysts on Wall Street, 14 rate GE stock a buy.
Who owns the most GE stock?
The top shareholders of GE are H. Lawrence Culp, Jr., Russell Stokes, Jeffrey S. Bornstein, T. Rowe Price Associates Inc., Vanguard Group Inc., and BlackRock Inc.
May 12, 1997: a 2-for-1 split of common shares. May 8, 2000: a 3-for-1 split of common shares. Feb. 26, 2019: a 104-for-100 split of common shares.
GE pays a dividend of $0.32 per share. GE's annual dividend yield is 0.47%. General Electric Co's dividend is lower than the US industry average of 1.64%, and it is lower than the US market average of 3.76%.
GE Long-Term Chart (1990 – 2020)
A pullback into 2008 accelerated into a full-blown panic, dropping the stock more than 85% into the 2009 low at $5.51.
GE's Difficult Decade
GE started the 2010s trading at around $14.50. The early years of the decade were actually good to GE investors, and the stock rallied as high as $33 by mid-2016. Unfortunately, the gains stopped there for GE. Shares traded back down below $20 by late 2017.
The GE model died because of global competition, the technology revolution, investor power, and the spread of professional management. Since GE was such a model, there are still mini-GE conglomerates everywhere. Some big ones, like Tyco, were dissolved early. But others remain, including in emerging markets.
GE decided to buy back about $25 billion in debt, up from its original target of $23 billion. With the added debt repurchased, GE will have paid back about $80 billion in debt between 2018 and 2021.
GE operates aviation, power, renewable energy, and healthcare businesses. Aviation currently generates the most profit and revenue for GE.
Fortunately for Buffett, he did not buy common shares of GE stock. Instead, he bought preferred shares, which paid an annual dividend yield of 10%. Those shares were also convertible, meaning Buffett could choose to convert them to common shares.
On November 9, General Electric (NYSE:GE) announced a three-way breakup of the company. Combining GE Renewable Energy, GE Power, and GE Digital into one business, positioned to lead the energy transition, and then pursuing a tax-free spin-off of this business in early 2024.
Why is GE doing a reverse split?
"The purpose of the reverse stock split is to reduce the number of our outstanding shares of common stock, and to increase the per share trading price of our stock to levels that are better aligned with companies of GE's size and scope and a clearer reflection of the GE of the future, not the past."
The top shareholders of GE are H. Lawrence Culp, Jr., Russell Stokes, Jeffrey S. Bornstein, T. Rowe Price Associates Inc., Vanguard Group Inc., and BlackRock Inc.
