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

Zacks Equity Research

General Electric (GE) closed at $6.83 in the latest trading session, marking a +0.44% move from the prior day. The stock lagged the S&P 500's daily gain of 1.54%. Meanwhile, the Dow gained 0.85%, and the Nasdaq, a tech-heavy index, added 1.87%.

Heading into today, shares of the industrial conglomerate had gained 0.59% over the past month, lagging the Conglomerates sector's gain of 1.01% and outpacing the S&P 500's gain of 0.57% in that time.

Investors will be hoping for strength from GE as it approaches its next earnings release, which is expected to be July 29, 2020. In that report, analysts expect GE to post earnings of $0.06 per share. This would mark a year-over-year decline of 64.71%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $17.25 billion, down 40.16% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $0.04 per share and revenue of $79.94 billion, which would represent changes of -93.85% and -24.38%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for GE. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

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 remained stagnant. GE is currently a Zacks Rank #4 (Sell).

In terms of valuation, GE is currently trading at a Forward P/E ratio of 164.85. This valuation marks a premium compared to its industry's average Forward P/E of 19.67.

It is also worth noting that GE currently has a PEG ratio of 36.63. 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. GE's industry had an average PEG ratio of 3.32 as of yesterday's close.

The Diversified Operations industry is part of the Conglomerates sector. This industry currently has a Zacks Industry Rank of 190, which puts it in the bottom 26% 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.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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