What Common Misconceptions About GE Stock?

Introduction

General Electric company (GE) is an American multinational company with its headquarters based in boston. The company is diversified into verticals like healthcare, energy
(vernova), Aerospace and finance. Founded in 1892, the company has been through a series of ups and downs when it comes to good business. In 2020, it appeared 33rd on the Fortune 500 lists of largest firms in the United States by gross revenue.

GE was founded with the goal of fulfilling American industrial needs of light and electricity. It quickly gained popularity after the merger of Thompson-Houston  company and Thomas Edison’s  Edison General Electric company. Its early products were Light bulbs, electric locomotives, x-ray machines, and electric stoves. It started producing electric home appliances and became a pioneer in changing the way of American households’ living style. 

In 2018 the company ended its more than 100 years of its presence on the Dow Jones and now is much less in its presence as it splits itself into three verticals in 2024 as GE Healthcare, GE Energy, and GE Aerospace. 

GE Stock Performance 

The GE stock has a market capitalization  of $182.72 billion, a p/e  ratio of 54.73, a price-to-earnings-growth ratio of 1.70 and a beta of 1.21.  The company determined $1.20 EPS for the quarter, top analysts’  say of $0.99 by $0.21. Company had revenue of $9.09 billion for the quarter, compared to analyst estimates of $8.44 billion. General Electric had a return on equity of 16.07% and a net margin of 7.66%. The firm’s quarterly revenue was up 3.9% on a year-over-year basis. During the same period last year, the firm earned $0.68 earnings per share. On average, analysts predict that General Electric will post $ 4.15 earnings per share for the current year.

GE paying dividends 

The company also announced quarterly dividends that it paid to its investors at $0.28 per share.On an yearly  basis it is a dividend of $ 1.12 with a yield of 0.67%. Presently its dividend payout ratio is 36.72%.

The fall in GE stock 

In January 2017 , the company announced job cuts by 12000 and the stock fell by 45% over a year. In November 2017, it brought restructuring and halved its quarterly dividend from 24 cents to 12 cents per share.In December 2018 , the company cut the dividend to 1 per cent share and laid off thousands of employees across its verticals.

Around 2020 , the stock fell to $43.92 following the 2019 covid .GE’s Aviation unit was hit hard , as travel was lessened and there was no demand for aircraft engines from major companies like Boeing for which GE makes the engines. It laid off 10% of its employees. 

After covid performance

In 2021, the shares rose by nearly 10%. The company announced a deal merging its GE Capital Aviation Services aircraft leasing unit with AerCap Holdings. The transaction was completed in November, netting about $23 billion in cash and a 46% stake in the combined business.

In 2023, GE announced plans to invest over $450 million in its existing U.S. manufacturing facilities. The company also had solid revenue growth, about 20%, for GE Aerospace in 2022.

GE restructures itself 

In 2024 GE separated its three verticals as public companies as Aviation business, energy and medical equipment unit.This has marked the end of industrial giant.Each newly independent company is focused on their individual markets. This is not only a restructuring but also a reflection of the strategic shift of the company towards specialization. 

What analysts have to say?

 Analysts have had their say on GE shares. Barclays boosted their target price on General Electric from $175.00 to $200.00 . It gave the stock an “overweight” rating in a research note. JPMorgan Chase & Co. upped their price objective on shares of General Electric from $148.00 to $175.00 .They gave the stock an “overweight” rating in a research. Jefferies Financial Group increased their price objective on shares of General Electric from $185.00 to $190.00 . It gave the company a “buy” rating in a research .

Argus boosted their target price on shares of General Electric from $170.00 to $180.00 and gave the stock a “buy” rating in a research. Stocknews downgraded shares of General Electric from a “buy” rating to a “hold” rating in a report. Two investment analysts have rated the stock with a hold rating and thirteen have issued a buy rating to the company.  General Electric presently has a consensus rating of “Moderate Buy” and a consensus price target of $190.38.

Misconceptions about GE stock

Apprehension that followed the low pricing of GE shares and a decline in their stock prices , has led to many misconceptions as many analysts have kept their opinion low regarding GE. Restructuring has also led to investors thinking bearish regarding the stocks , and feel risky about investing in GE shares.

Despite a decline that is publicized amongst masses, their is a silver line when it comes to the industrial giant that employs thousands of people worldwide. Even if the GE stock is not a buy right now. Over the long term, buying an index fund, such as SPDR S&P 500 , would have delivered safer, higher returns than buying GE stock.

However, shares have outperformed since mid-2022 as General Electric revived growth and began to transform into an aerospace-focused company.Many also think that GE  will generate a good revenue over the years and will be a good stock to buy. For instance CRKN stocks are on the rise and analysts have no apprehensions about buying them , similarly GE stocks needs to be on a safer aspect of the investors decisions.

FAQS 

How has GE’s stock performed historically?

GE has experienced significant volatility in its stock price over the years, influenced by operational challenges and market conditions. Historical performance can be reviewed using stock charts and financial news archives.

What are the risks associated with investing in GE stock?

Risks include market volatility, operational challenges, competition, regulatory changes, and the company’s high debt levels.

Is GE stock a good investment?

Whether GE stock is a good investment depends on your individual financial goals, risk tolerance, and market conditions. It’s advisable to conduct thorough research or consult a financial advisor before making investment decisions. Use the best stock alert app for better insights.