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GE Investor Update: How Will New CEO Right the Ship?

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Part 5
GE Investor Update: How Will New CEO Right the Ship? PART 5 OF 5

What Analysts Recommend for GE ahead of Investor Update

Analysts’ recommendations

General Electric (GE) is covered by 17 analysts. The company has a mean rating of 2.6, which indicates a “hold.” Out of these analysts, 29.4% recommend a “strong buy” for the company’s stock. 11.8% have a “buy” opinion on the company, and 35.3% recommend a “hold” for GE stock. 17.6% of analysts suggest a “sell” for GE.

What Analysts Recommend for GE ahead of Investor Update

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In analysts’ yearly EPS forecasts for General Electric, there hasn’t been a single upward revision in the last four weeks. In fact, GE witnessed downward revisions for the full year 2017 from seven analysts polled by Thomson Reuters. A total of eight analysts have revised their fiscal 2018 forecast downward for the company in the last four weeks.

Analysts’ target price for GE and peers

General Electric has lost ~37% of its value since the beginning of 2017. Key equity research houses have cut their target price for the company in the last one month. At present, GE has a consensus target price of $25.4 per share with a return potential of 26.2%. Let’s compare this with peers’ target price and potential returns.

  • Siemens has a current target price of 2.00 euros.
  • Honeywell International (HON) has a price target of $153.0 with a potential return of 4.2%.
  • United Technologies (UTX) has a target price of $127.4 with a return potential of 5.9%.
  • 3M (MMM) has a price target of $224.60.

Investors who want indirect exposure to large-cap stocks can invest in the SPDR S&P 500 ETF (SPY). General Electric consists of 0.9% of SPY’s holdings.

GE’s ‘hold’ rating

General Electric cut its full-year 2017 guidance on all major metrics such as EPS, operating cashflows, and free cashflows. The company, which still remains at the center stage of the US industrial sector, is in bad financial health. However, the leading industrial sector indicators in the US have picked up pace recently, and the US economy has been growing, which is evident in September US employment data. For now, we’ll have to wait and see whether John Flannery’s roadmap for 2018 can get General Electric back on track.

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