General Electric Price Prediction: Is GE Buying Right Now?

The stock reported revenue growth for the first time in 6 years.
The price of GE rose 157% in the last 7 months.
General Electric’s price prediction is supported by indicators and various levels of support and resistance

General Electric is an American company that was founded long ago in 1892 by famous names like Thomas Edison, J.P Morgan, Charles A. Coffin, EJ Houston and E. Thompson.

The company operates in vast and various fields like Aviation, Power, Renewable energy, Digital industry, Manufacturing, and Finance. The company also has various subsidiaries like GE Healthcare, GE Aerospace, GE Digital, and many more

The headquarters of General Electric is currently in Boston, US, and the CEO of the Company is H. Lawrence Culp, Jr., who came on board in 2018.

Is GE a Good Stock to Buy Right Now

General Electric (GE) has experienced a drought of declining sales over the past few years. According to Macrotrends financial reports, the company’s revenue figures have shown a decreasing trend from $119 billion in 2016 to $90 billion in 2019, further declining to $74 billion in 2021.

However, there is a glimmer of hope as the company finally showed positive growth of 4% in its annual report for 2022. Despite this improvement, GE continued to face challenges in generating net profit, reporting negative figures for the same year.

On a positive note, GE managed to achieve a positive EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) in 2022, recording just under $-64 million. This indicates an improvement compared to the staggering loss of $6 billion in 2021.

It is worth noting that the major negative impact on GE’s positive EBITDA in 2022 was the loss from discontinued operations. This indicates that the company has been taking measures to divest certain assets or business segments, which may have affected its overall financial performance.

Some key performing ratios & Margins of General Electric to look at

Return on Equity is 28%
Price to earnings: PE ratio is 13.2
The current debt-to-equity ratio is 0.62
The assets-to-liabilities ratio is 1.25
The gross margin is 27%
Operating margin is 8.6%
Net profit margin is 11.6%

The Metrics have been calculated by financial statements, provided by macrotrends.net

General Electric Technicals

General Electric (GE) has faced a prolonged period of challenges since the middle of 2017, leading to a substantial decline in its stock price. From an average level of $180, the stock has experienced a relentless downtrend, hitting a low of $34.27 in May 2020. This three-year downfall was primarily driven by declining sales and market sentiment surrounding the company.

During the time between March 2020 and November 2020, the stock went through a phase of consolidation, oscillating between a resistance level of $53 and a support level of $34.25. The market appeared to be searching for equilibrium as buyers and sellers wrestled for control, resulting in sideways price movements.

However, the stock’s price dynamics changed when it broke below the crucial support level of $34.25. Subsequently, there was a brief upward rally, pushing the price to $89, before encountering another significant crash, bringing it down to $48. Notably, substantial trading volumes accompanied these price swings, indicating heightened market activity and investor interest.

The increased volatility and price fluctuations during this period can be attributed to multiple factors, such as changing market sentiment, shifts in company performance, and external economic events.

General Electric (GE) has been on an upward trend, rising from the support level of $48 established in October 2022. The stock broke through previous resistance in February and, after the crossover of Exponential Moving Averages (EMAs), has consistently moved upward, currently trading at $113.

The first significant resistance lies at $127, dating back to 2017 when the price broke below this level, turning it into resistance. A potential challenge for further upward movement may arise here. The second and higher resistance is at $197, which has been a historical price point since 2016. Despite repeated testing, the stock has struggled to surpass this level, making it an important resistance zone.

On the support side, immediate support is at $86.88, which was a broken resistance. Significant trading volume around this level indicates its critical role as a turning point from resistance to support. The second support level is at $50, confirmed as support and carrying psychological significance as a round number, potentially attracting buying interest.

As the stock continues its ascent, monitoring its interaction with these resistance and support levels is crucial. A successful breakthrough of resistance levels could indicate further upside potential, while a failure to sustain above key support levels may signal a possible correction or consolidation.

Considering the current situation of declining sales and other financial indicators, a 3rd support level is observed at $34.07. This level is supported by two confirmations from back in 2020, making it a crucial and potentially significant price level for the stock.

Indicators

The MACD chart is indicating a potential short-term downturn as the signal line and MACD line are contending for a crossover. Currently, the signal line has moved up and over the MACD line, which suggests a bearish signal. The minimal difference of less than 0.12 points between the two lines further emphasizes the uncertainty and potential for a downward move.

The RSI is signaling an overbought condition with a reading of 74. Although the stock’s price history rarely goes above 80 points, there is a possibility of a correction if the price spikes further. Investors should be cautious and monitor the RSI closely for any signs of a potential reversal in the stock’s price trend.

In April 2023, the 50 EMA had recently crossed above the 200 EMA, indicating a short to medium-term uptrend in the stock. The current levels for the EMAs are $89.29 for the 50 EMA and $79.5 for the 200 EMA. This bullish crossover suggests that the stock’s price may continue to trend upward in the near term.

Will GE Stock Price Rise in 2023

The stock price of General Electric (GE) will be heavily influenced by how the market perceives the company’s financials and fundamentals. Recent quarterly reports showing an earnings growth of approximately 15% have been viewed positively by investors, Reflecting in the stock price.

If the company’s fundamentals continue to exhibit positive trends, the current growth momentum may carry forward into 2023, potentially boosting the stock price. However, it’s crucial to remain mindful that stock prices are subject to various external factors, market sentiment, and broader economic conditions.

Considering the current situation, it is projected that the stock price for 2023 could trade within a range of $127 (resistance level) and $86 (support level). The next quarterly report’s impact is critical; positive results may lead to a potential break above the resistance, driving the price higher. Conversely, a decline in financial performance could result in further downward pressure on the stock price.

Conclusion

General Electric, a renowned American company founded in 1892 by J.P. Morgan and Thomas Edison, holds a prominent position on the New York Stock Exchange (NYSE). The company operates across diverse fields and boasts a substantial number of subsidiaries. However, in recent years, General Electric faced challenges due to declining sales, impacting its overall performance until 2021.

The positive turn came in 2022 when the company reported a favorable EBITDA, leading to a remarkable 157% increase in the stock price. This improvement indicates a potential recovery and positive market sentiment towards the company’s prospects.

As the stock continues to trend upward, several good support levels are observed. The success of future predictions for the stock will primarily hinge on upcoming fundamental health reports of the company. Investors will keenly analyze the financials, performance indicators, and management strategies to gauge General Electric’s future outlook.