What Should Investors Know About General Electric Company (GE) Stock?

Now trading at a price of $85.04, General Electric Company has moved 0.39% so far today. In contrast, the S&P 500 index moved -0.57%. Read below for a basic value analysis of General Electric Company.

General Electric Company shares moved 18.04% over the last 52 weeks, with a high of $85.65 and a low of $46.68. During this time, the stock outperformed the S&P 500 index by 27.53%. As of January 2022, the company's 50-day average price is $76.0. General Electric Company (GE) is an American multinational conglomerate incorporated in New York City and headquartered in Boston. The large-cap Industrials company is based in Boston, MA. General Electric Company has returned a 0.38% dividend yield over the last 12 months.

Higher Operating Margins Than the 13.8% Industry Average:

2019-12-31 2020-12-31 2021-12-31 2022-12-31
Revenue (MM) $90,221 $75,833 $74,196 $76,555
Revenue Growth n/a -15.95% -2.16% 3.18%
Gross Margins 8.81% 4.26% 83.37% 80.57%
Gross Margins Growth n/a -51.65% 1857.04% -3.36%
Operating Margins -10.35% -3.7% 62.2% 56.71%
Operating Margins Growth n/a 64.25% 1781.08% -8.83%
Earnings Per Share -$0.57 $0.65 -$5.93 $0.21
EPS Growth n/a 214.04% -1012.31% 103.54%
Diluted Shares (MM) 8,738 8,765 1,099 1,089
Free Cash Flow (MM) $2,639 $165 $1,971 $4,432
FCF Growth n/a -93.75% 1094.55% 124.86%
Capital Expenditures (MM) $6,095 $3,403 $1,361 $1,484
Net Debt / EBITDA -7.01 -26.82 0.41 0.33

General Electric Company Is Reasonably Valued:

Compared to the Industrials sector's average of 20.49, General Electric Company has a trailing twelve month P/E ratio of 160.45 and, according to its EPS guidance of 3.45, an expected P/E ratio of 24.65.

However, General Electric Company is likely undervalued in terms of its equity because its P/B ratio is 2.829 compared to its sector average of 3.78. The company's shares are now trading 577.07% above their fair value as expressed by Benjamin Graham's formula:

√(22.5 * EPS * book value per share) = √(22.5 * 0.21 * 33.38) = $12.56

Despite General Electric Company's elevated earnings multiple, the company's impressive cash flow trend and reasonable leverage demonstrate the company may be fairly valued.

General Electric Company Is the Subject of Mixed Market Indicators:

18 analysts are following General Electric Company and have set target prices ranging from $75.0 to $97.0 per share. On average, they have given the company a rating of buy. At the current price of $85.04, GE is trading -2.26% away from its average analyst target price of $87.01 per share, implying an analyst consensus of some upside potential for the stock.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.