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January 30, 2024
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GE’s price rising – Aerospace Business on the move
In Brief: The stock of General Electric (GE 5.27%) started the day off brightly for shareholders after its virtual investor meeting reaffirming prior estimates for full-year revenue, earnings, and free cash flow.
GE reiterated its fiscal year 2023 guidance, with organic revenue growth of single digits, adjusted earnings per share of $1.60 to $1.95, and free cash flow generation of $3.4B to $4.2B. Analysts expect adjusted earnings per share to be $1.94 for the full year.
Additionally, the company affirmed revenue growth and FCF forecasts for its aviation and energy segments for 2023. For aviation, it expects a profit of $5.3B to $5.7 B, and for energy, a loss of $200M – $600M
GE insists that this year it will generate high-single-digit revenue growth. It would suggest sales between $63.5B and $65B after you subtract $18.5B from GE Healthcare (GEHC -0.33%), which is now a separate company.
GE Aerospace – the future of GE growth
The organic revenue growth at GE Aerospace is expected to be in the mid-to-high teens, the operating profit is expected to be between $5.3B and $5.7B, and the free cash flow is expected to be positive.
“The future is bright at GE. We are operating from a stronger foundation and a fundamentally simpler business that is creating significant value today and going forward. GE Aerospace is defining flight to today, tomorrow, and the future with our differentiated technology and extensive service capabilities.” – CEO Larry Culp.
GE’s executives told investors at an Ohio conference that GE Aerospace expect their profit margins to fall approximately 20% through 2025. A jump in air travel has driven up sales at its aerospace division, which makes and services engines for Boeing Co (BA.N) and Airbus SE (AIR.PA) jets.
GE reiterated that it was aligned with Boeing and Airbus on LEAP jet engine demand through 2024, adding that 2025 supplies were being discussed as part of a standard process. Also, about half of Airbus’ A320/321neo jets and Boeing’s 737 MAX jets are powered by engines made by CFM International, GE’s joint venture with Safran SA (SAF.PA). According to this, Airbus will boost its narrow-body output to 65 jets a month from 45, but its plans to increase it to 75 jets remain unclear. Earlier this month, Airbus said it would be able to produce 65 aircraft per month by the end of 2024 and 75 by 2026.
General Electric (GE: NYSE) stock overview
Currently, shares of the company are trading at $91.56 per share, increasing 5.27%. GE stock pegged its highest level since May 2018 intraday after rallying into the investor event.
Analyst consensus had rated the share as a ‘Moderate Buy’ with an average price target of $90.00 and a 1.7% downside risk. With a high forecast of $98.00 and a low forecast of $80.00.
Technically speaking, General Electric’s (GE)’s Moving Averages Convergence Divergence (MACD) indicator is 2.02, suggesting General Electric is a Sell, Relative Strength Index (RSI) is 67.88, creating a Neutral signal and its Trend Strength Indicator (ADX) is 21.88, creating a Neutral signal.
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