General Electric (GE) Stock Sinks As Market Gains: What You Should Know

In the latest trading session, General Electric (GE) closed at $8.17, marking a -1.8% move from the previous day. This change lagged the S&P 500's 1.06% gain on the day. At the same time, the Dow added 0.83%, and the tech-heavy Nasdaq gained 1.72%.

Coming into today, shares of the industrial conglomerate had lost 31.75% in the past month. In that same time, the Conglomerates sector lost 7.34%, while the S&P 500 lost 2.09%.

GE will be looking to display strength as it nears its next earnings release, which is expected to be January 23, 2019. In that report, analysts expect GE to post earnings of $0.19 per share. This would mark a year-over-year decline of 29.63%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $31.77 billion, up 1.18% from the year-ago period.

GE's full-year Zacks Consensus Estimates are calling for earnings of $0.68 per share and revenue of $120.11 billion. These results would represent year-over-year changes of -35.24% and -1.62%, respectively.

Investors might also notice recent changes to analyst estimates for GE. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 27.37% lower within the past month. GE currently has a Zacks Rank of #5 (Strong Sell).

In terms of valuation, GE is currently trading at a Forward P/E ratio of 12.27. Its industry sports an average Forward P/E of 17.5, so we one might conclude that GE is trading at a discount comparatively.

It is also worth noting that GE currently has a PEG ratio of 2.23. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Diversified Operations industry currently had an average PEG ratio of 1.89 as of yesterday's close.

The Diversified Operations industry is part of the Conglomerates sector. This group has a Zacks Industry Rank of 109, putting it in the top 42% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow GE in the coming trading sessions, be sure to utilize

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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