General Electric Company (GE) is set to unveil its fiscal 2023 fourth-quarter earnings on January 23, projecting a revenue of $17.67 billion and an expected EPS of $0.89. Looking ahead, estimates for the fiscal 2024 first quarter indicate a 9.6% revenue increase to $15.88 billion and a significant 155.1% surge in EPS to $0.69 year-over-year.

Additionally, on January 15, 2024, Kuwait's Ministry of Electricity, Water, and Renewable Energy achieved a significant milestone by completing upgrades to four 9F.03 class gas turbines at the Sabiya Combined Cycle Power Plant, a project spearheaded by a multiyear service agreement between Alghanim International and GE.

These enhancements, part of Kuwait's broader initiative to modernize its power generation infrastructure, are poised to elevate the power plant's block output by up to 6.3%, concurrently reducing the heat rate by as much as 1.8%. This translates to a remarkable increase in power production, contributing an additional 70 megawatts (MW).

This outcome is tantamount to taking approximately 16,000 cars off Kuwait's roads. GE stands to gain significantly from this venture, as its technological contributions would enhance the power plant's performance, aligning with global sustainability goals and establishing it as a key player in Kuwait's ongoing energy transformation.

Additionally, on January 9, it was reported that GE secured a landmark deal to construct hundreds of turbines for the SunZia Wind Project, marking the largest onshore wind turbine order in the Western Hemisphere. The agreement, part of an equipment order and pact with Pattern Energy, reinforces GE's position in the renewable energy sector.

The 674 turbines involved in this project are anticipated to generate an unprecedented amount of electricity upon the project's completion in 2026. The strategic collaboration would position GE as a key player in shaping the future of sustainable energy production in the region.

Shares of GE have gained 18.1% over the past six months and 68.9% over the past year to close the last trading session at $129.81.

Here are the other financial aspects of GE that could influence its performance in the near term:

Strong Financials

For the fiscal 2023 third quarter that ended September 30, 2023, GE’s total revenues increased 19.9% year-over-year to $17.35 billion. Net earnings attributable to GE common shareholders and net earnings per share amounted to $258 million and $0.23, up 193.2% and 187.5% from the prior year’s quarter, respectively.

Solid Historical Growth

GE’s revenue and EBITDA increased at CAGRs of 1.1% and 26.2%, respectively. In addition, the company’s net income and EPS grew at respective CAGRs of 38% and 44.7% over the same time frame.

Optimistic Analyst Estimates

The consensus revenue estimate of $71.11 billion for the fiscal year ending December 2024 indicates a 9.2% year-over-year increase. Likewise, the consensus EPS estimate of $4.62 for the ongoing year exhibits a 74.1% increase from the prior year. Moreover, the company surpassed its consensus revenue and EPS estimates in three of four trailing quarters.

Robust Profitability

The stock’s trailing-12-month EBIT margin of 11.05% is 12.2% higher than the 9.84% industry average. Moreover, its trailing-12-month net income margin of 11.90% is 93.1% higher than the 6.16% industry average. In addition, the stock’s trailing-12-month levered FCF margin of 8.73% is 46.1% higher than the 5.98% industry average.

POWR Ratings Exhibit Solid Prospects

GE’s sound outlook is apparent in its POWR Ratings. The stock has an overall rating of B, which translates to Buy in our proprietary rating system. The POWR Ratings are calculated by taking into account 118 different factors, with each factor weighted to an optimal degree.

Our proprietary rating system also evaluates each stock based on eight distinct categories. GE has a B grade for Sentiment, aligning with positive annual estimates from analysts.

GE is ranked #8 out of 35 stocks in the B-rated Industrial - Manufacturing industry. Click here to access GE’s Growth, Value, Momentum, Stability, and Quality ratings.

Bottom Line

GE's strategic initiatives are set to fortify its market standing, rendering it an attractive investment opportunity with promising growth potential. Furthermore, backed by a robust financial performance in the latest quarter, strong profitability, and positive fiscal 2024 estimates, investing in GE seems wise.

How Does General Electric Company (GE) Stack Up Against Its Peers?

While GE has an overall grade of B, equating to a Buy rating, you may check out these other A-rated (Strong Buy) stocks within the Industrial - Manufacturing industry: Siemens Aktiengesellschaft (SIEGY), Johnson Electric Holdings Limited (JEHLY), and CompX International Inc. (CIX). To explore more Industrial - Manufacturing stocks, click here. 

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GE shares were trading at $131.61 per share on Monday afternoon, up $1.80 (+1.39%). Year-to-date, GE has gained 3.12%, versus a 1.77% rise in the benchmark S&P 500 index during the same period.

Aanchal's passion for financial markets drives her work as an investment analyst and journalist. She earned her bachelor's degree in finance and is pursuing the CFA program. She is proficient at assessing the long-term prospects of stocks with her fundamental analysis skills. Her goal is to help investors build portfolios with sustainable returns.

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