At current levels, after a 33% decline year-on-year, we believe general electric stock (NYSE:GE) is no longer undervalued. GE stock has now fallen from $96 in early January to $65. The YTD -33% return for GE marks an underperformance compared with the -22% return for the broader S&P500 index.
Looking longer, GE stock is down 26% from levels seen in late 2019. This reflects an underperformance compared to some of its peers and the broader markets, in which honeywell stock increasing by 1%, 3M Stock Down 27%, and the S&P 500 index is up 16% over the same period. Our Dashboard – Why General Electric Stock Moved Provides more details on the factors behind the move over the past three years.
This 26% decline can be attributed to GE stock over the past three years. 1. The company’s P/S ratio, which currently fell 14% to 0.9x, from 1.1x in 2019, 2. 18% drop in General Electric Revenue $74 billion currently, compared to $90 billion in 2019, and 3. Its shares outstanding rose 5% to 1.1 billion in the period. That means the company’s revenue per share fell 22% from $90.42 to $70.46.
The fall in revenue can be mainly attributed to the impact of the Covid-19 pandemic on the company’s businesses, especially aviation, given that commercial airlines were one of the most affected sectors during the coronavirus crisis, with The weight has been on the overall performance of the company. Beginning of the epidemic. Aviation sales amounted to $21.3 billion in the past twelve months, compared to $32.9 billion in 2019 before the pandemic. Other business of the company – Healthcare, Renewable energy
Now, with the worst of the pandemic behind us, economies have seen recovery, and airlines are benefiting from a rebound in travel demand. This should result in a boom in the company’s aviation business in the years to come. As of Q1 2022, Aviation sales were up 12%, while segment profit grew 42%.
While the company has strong prospects, the current weakness in the broader markets is making it head-on. The S&P500 has now entered bear market territory, with rising concerns of slow economic growth in the face of high inflation, Fed action and supply chain disruptions. In addition, General Electric faces supply chain disruptions, which are expected to impact its near-term performance.
That said, with the recent decline in GE stock, we are now trading it at approximately 21x expected forward earnings. This is a lower multiplier than the 36x average for the last two years. We have a valuation of $101 per share, which represents a significant 56% upward move from the current market price of $65, which means investors can use the recent decline to enter GE stock for long-term gains. can improve. View our analysis General Electric Valuation, Is GE Stock Expensive or Cheap? For more information on GE’s assessment and how it compares with peers.
While GE stock’s valuation looks low, it’s helpful to see how. Companions of General Electric Fare on metrics that matter. You’ll find other valuable comparisons for companies across industries here. peer comparison,
In addition, the COVID-19 crisis has created several pricing discontinuities that can provide lucrative trading opportunities. For example, you’d be surprised how intuitive it is to approach stock valuations. Honeywell vs Amcor Technology
Stock prices across sectors have fallen sharply in recent months and we are now in a bear market for the first time since March 2020, when the COVID-19 outbreak triggered a market crash. We capture key trends in the Dow during and after major market crashes in our interactive dashboard analysis.market crash comparison,
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