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Stockchase InsightsGeneral ElectricGEHOLDJun 12, 2023

Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research.

With its 62% YTD increase, it is not cheap now at 52X earnings. Yield is tiny at 0.30%. But the balance sheet is remarkably better. It is now sitting on $39B cash (it does have $11B in preferred share obligations). Free cash flow is running about $5B annually. EPS is expected to dip this year before a very strong recovery expected in '24. GE's recent results reflect robust demand and margin gains in all units. Aerospace's margin of 19% vs. 16.9% consensus, even with a 53% jump in LEAP engine shipments, was led by surging commercial services and pricing. Margins may cool as rates rise. Renewables beat with 5% organic growth (after six straight declines) and 50 bps of margin expansion. Order gains of 94% show a rebound in Grid and Onshore Wind as the Inflation Reduction Act stimulates demand. Power's organic sales rose 11% on double-digit gains in Gas Power Services and solid pricing. The 2023 outlook may have upside in Aerospace, depending on the equipment vs. services mix and volume. Overall, a remarkable turn here. We like its growth prospects, but have some difficulty with the current valuation. We would rate it a HOLD.
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$106.23

Stock price when the opinion was issued

$357.02

As of Jun 18, 2026. Market Open.

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BUY ON WEAKNESS

They're separating their energy and aerospace businesses. If shares come down just $2-3, he would, but it never does because the CEO is amazing.

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TOP PICK

General Electric Company is an American multinational conglomerate founded in 1892, and incorporated in New York state and headquartered in Boston. The company operates in aviation, power, renewable energy, digital industry, additive manufacturing and venture capital and finance. Social media mentions are up 800% in the past 24h.

BUY ON WEAKNESS

Recent run up in share price good, but depends on where investors bought shares. Has sold off/spun off business units which has been good for performance. Trading at ~40x earnings which is high, but runway for growth is strong. Would wait for weakness in share price before buying.

HOLD

Amazing turnaround. Well-respected CEO. Commercial aerospace engine business has attractive growth prospects long term.

BUY

Just reported a fine quarter with a terrific aerospace business. Orders are up double digits, with services up 15% and equipment up 22%.

HOLD

Lots of changes the past few years. Not the same company as in the past. Like aerospace business, but not GE specifically. Better names in sector.

BUY

Are spinning off their power business to become a pure play in aerospace. Q3: orders up 34% YOY, Revenue up 25% YOY and segment profits up 33% YOY

BUY ON WEAKNESS

Company transforming itself (spinoffs etc.)
Very successful transformation.
Expected to be an aerospace business by the end of the year.
Current share price is expensive.

DON'T BUY

Still a work in progress. Cleaning it up, spinning off some divisions. In mediocre businesses that they can't get out of. Avoid. Better companies elsewhere.

SELL

Wait to return to break even?

The market lets you change horses halfway through the race, and more people should take advantage of that. A better company today than a year ago. CEO has been excellent. It has aerospace, power, and renewables. A lot of future growth is already built in to the price. He'd sell.

BUY

Up 75% YTD. The CEO has done an amazing job.

SELL

Take this as an opportunity to sell. Industrials are at a high, and GE has moved with them. Big tech is leading the market, but the market is broadening out, and that's critical for nabbing opportunities. Good job with challenges, but better and safer opportunities out there.

WATCH

They're killing it on the strength on its aerospace business. Early next year they will spin off their power division, so keep an eye on that.

BUY

Recent spinoff of healthcare & energy assets good for business.
Share price has out performed the past 1-2 years.
Expecting further growth in industrial business unit.
Good business model that is well run.

HOLD

Used to be diversified. Now more concentrated. New CEO has done a great job reinventing the company. Lots more potential down the road. Will continue to do well. In transition, and stock should do much better. Don't sell now.

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