GE - generally fine

Whilst the broader market saw significant weakness to end the week, there was notable early strength in General Electric (GE).. after earnings came in fine. GE settled -0.2% @ $27.23. Near term outlook is for renewed upside into May. First upside target is the $30/32 zone.


GE, daily

GE, monthly

Summary

First.. some details on Q1 earnings...

EPS (pre items*) 31 cents (33 cents previous year) vs market exp' of 30. Rev' was a major miss, $29.4bn vs market exp' of $34bn.

So... roughly $1.25 EPS a year, giving a PE of around 21... somewhat above the market average. Regardless, with a monstrous stock buy back of $50bn, along with the planned asset disposal of GE Capital (should raise around $25bn), the long term outlook appears fine.

*GE wrote off $16bn from GE capital.. so.. technically, a Q1 loss of $13.6bn... $1.35 a share. As ever.. the finer details are always important to consider.
-


Long term upside

GE looks set for very significant upside across the next few years. The disposal of GE capital (which almost took the company into bankruptcy in the 2008/09 crash) is a good thing.

The stock buy back will no doubt help to largely negate all moderate down cycles for the next THREE years.

*I am very bullish on GE (and be default, the Dow), the Aug' 2000 high of $41.42 looks a viable target by mid/late 2017.