What Analysts Think about General Electric after 1Q17 Results
General Electric (GE) has a mean rating of 2.1 with a “buy” rating from Reuter-surveyed analysts. After GE’s 1Q17 results, Wall Street analysts seem to be favoring the company. Of the 16 analysts tracking GE, five have given it a “strong buy” recommendation. Five have also given it a “buy,” and five have recommended a “hold” for GE stock. Only one analyst has given it a “sell” recommendation.
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Analysts’ price target for GE and its peers
Analysts have a 12-month price target of $32.90 for General Electric. The stock’s closing price on April 24, 2017, was $29.60. That translates to a potential return of 11.1% over the next year. In the last year, GE returned -3.9% to investors. Let’s look now at the 12-month target prices and return potentials for GE’s peers:
- Illinois Tool Works (ITW): target price of $134.90 with a return potential of -3.5%
- 3M (MMM): target price of $190.50 with a return potential of -1.9%
- United Technologies (UTX): target price of $118.70 with a return potential of 3.2%
- Honeywell International (HON): target price of $130.70 with a potential return of 2.8%
Why a “buy” for General Electric?
General Electric has been moving at a steady pace on its path of a core industrial company. The company’s recent moves add value to this story. With the Alstom acquisition, the synergies will see GE’s Power segment become a dominant player in the world marketplace.
GE Capital’s asset sale is marching in the right direction and has generated enough dividends for the parent company. GE’s huge thrust in 3D (three-dimensional) manufacturing along with the Predix platform should result in more cost savings, thus paving the way for higher earnings.
The combination of GE Oil & Gas and Baker Hughes (BHI) is expected to shake up the world’s oil and gas (UNG) space. GE’s state-of-the-art IoT (Internet of Things) technology will most likely reduce the new company’s operating costs going forward. If the oil and gas sector booms in the wake of recent demand-supply changes, then GE is set to be a clear winner in that game.