It’s time to talk about one of the most well known industrial names within the market. Here is the breakdown of $GE, otherwise known as General Electric.
Current Price: $10.91
52/Wk High: $13.26
52/Wk Low: $5.48
Market Cap: $94.3 billion
Read below for the breakdown!
General Electric is a major US industrial company with a vast array of business segments across the company.
Breaking down the stock price according to TREFIS (@trefis) data it is quite obvious where a majority of General Electric’s business comes from.
According to TREFIS research, 52.22% of the stock price is based on General Electric’s Aviation segment.
All the while 32.24% is based on the company’s Healthcare segment, 8.55% on their Power segment, 5.89% on the GE Capital segment, and 0.99% on their renewable energy segment.
Digging into the numbers the COVID-19 pandemic has taken a toll on General Electric but the company is finally starting to show signs of a turnaround.
General Electric beat expectations of a $-0.04 EPS with an EPS of $0.06 in the third quarter. Revenues (GAAP) came in at $19.4 billion, representing a 17% decline.
Furthermore, total orders declined by 31% to $15.5 billion and industrial organic revenues dropped 12% to $17.9 billion.
On the bright side, General Electric reduced debt by $11.7 billion on the year and launched a $3 billion aviation leasing operation with PIMCO.
Not only that but General Electric CEO Lawrence Culp Jr. noted that GE is expected to see a free cash flow of at least $2.5 billion by Q4 and positive cash flow in 2021.
General Electric not only improved from the financial front but is also attempting to be more earth-friendly, announcing their exit from the new-build coal power market and a goal to be carbon neutral by 2030.
Taking a look at the balance sheet the numbers are improving but have a long ways to go.
Total Debt: $79.463 billion
Total Liabilities: $221.046 billion
Total Assets: $254.315 billion
Cash & Short Term Inv: $39.162 billion
On the other hand, the valuation has improved but is not too far gone.
Price to Earnings: 26.05x
Price to Sales: 1.09x
Price to Book: 2.75x
Price to Cash Flow: 38.16x
Surprisingly management has also been able to pull through the pandemic with solid strength.
Return on Equity: 11.45%
Return on Assets: 1.53%
Return on Invested Capital: 1.89%
Given the numbers, the analysts are mixed on General Electric with the mean price target sitting at $9.88/share, representing a -8.98% loss.
Furthermore, General Electric’s high price target is $13.00/share, representing a 19.76% gain, while the low price target is $5.00/share, representing a -53.94% loss.
The big money is also quite involved, with 60.41% of General Electric being owned by institutions. Top holders include T. Rowe Price Associates, The Vanguard Group, and Fidelity Management & Research.
On a technical basis, $GE has been on fire in the last three months, running nearly 68%. According to the six-month charts, the MACD is moving upward within a tight range of around 0.7362.
The six-month charts are also indicating an RSI of 80.69 and CCI of 111.61, both of which are on the high end of things. It is also important to note that $GE is trading fewer than 3 points off its highs.
In short, given the likely US recovery from the pandemic in 2021, improved management, and vaccine news General Electric seems to be a solid long-term buy.
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Disclaimer: This is not direct financial advice, simply an opinion based on independent research.