General Electric Co.: A Record-Breaking Year


General Electric Co. (GE) is set to conclude its 150-year history with a bang. In the second quarter, GE’s power and renewable-energy business will be spun off as GE Vernova, while the remaining business will be relaunched as GE Aerospace. This move follows the company’s earlier separation of GE HealthCare Technologies Inc. in December 2022.

Despite bidding farewell to the conglomerate co-founded by Thomas Edison, investors on Wall Street have reason to celebrate. GE’s stock has skyrocketed by 95.1% in 2023 as of Friday’s afternoon trading session. This remarkable surge marks the highest annual increase in the stock’s history, dating back to 1972, according to Dow Jones Market Data. The closest year in performance was 1982, where GE gained 65.4%. In comparison, the S&P 500 index has recorded a modest 24.2% rally this year.

Noteworthy Performance: GE stock experiences largest rally in over 2 years following stellar earnings and a raised outlook.

Despite the impressive gains leading up to the breakup, analysts believe there is still room for further growth. It is widely understood that a company’s fragmented parts often have greater value when evaluated separately.

Wells Fargo analyst Matthew Akers has set a pre-breakup target of $144 for GE’s stock, indicating a potential upside of around 13% from the current levels.

“GE combines an appealing business model with a substantial aftermarket mix, a talented management team, a clean balance sheet, long-term margin potential, and an inherent catalyst with the Vernova spin in early Q2,” Akers wrote.

GE’s exceptional performance and promising future have made it an attractive choice among investors, positioning the company for continued success well beyond its historical legacy.

General Electric’s Stock Value Rises with GE Vernova and GE Aerospace

According to J.P. Morgan analyst Seth Seifman, the combined equity values of GE Vernova and GE Aerospace, including GE’s equity stake in GE HealthCare, amount to approximately $149 billion. This surpasses GE’s current market capitalization of around $139 billion.

Analysis carried out by FactSet reveals that out of the 18 analysts covering GE, 12 have a bullish outlook while six remain neutral. Notably, there are no bearish analysts. The average price target for GE is $139.23, which represents a potential increase of about 9% from the current levels.

2023 is a significant year for GE as it symbolizes the completion of a five-year turnaround for the company’s stock. This transformation has been led by CEO Larry Culp, who will continue to hold the position at GE Aerospace.

In 2018, GE encountered its most challenging year yet, with a staggering 56.6% decline in its stock value. The previous year, in 2017, the company experienced its fourth-worst performance with a decline of 44.8%.

The situation deteriorated to such an extent that GE was removed from the Dow Jones Industrial Average (DJIA) in June 2018, putting an end to its unprecedented 111-year presence on the blue-chip barometer.

Larry Culp assumed the role of CEO in October 2018, subsequently overseeing a significant improvement in GE’s stock performance. Under his leadership, GE’s stock has only had two negative years – a 3.2% decrease in 2020 due to the impact of the COVID-19 pandemic on the aerospace industry, and an 11.3% slump in 2022 fueled by concerns over rising inflation and interest rates, which raised recession fears.

Since the end of 2018, GE’s stock has surged by an impressive 181%. In comparison, the S&P 500 has rallied 90%, and the Dow has gained 61%.

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