What’s Happening With General Electric Stock?

GE: General Electric logo
General Electric

The price of General Electric stock (NYSE: GE) has fallen over 15% in a month, while it’s down 19% YTD. The company recently reported its Q1 results, which were better than the street estimates. GE’s total revenue of $17.0 billion was flat y-o-y but marginally above the $16.9 billion consensus estimate. Looking at segments, Aviation sales grew 12%, and Healthcare saw 1% revenue growth. However, this was offset by a 12% decline in Renewable Energy and an 11% fall in Power revenues. Double-digit growth in Aviation is a positive for the company, given that it was the worst affected segment since the beginning of the pandemic. Strong demand from commercial airlines drove the segment growth. Looking at the bottom line, the adjusted EPS of $0.24 was comfortably above the $0.19 consensus estimate.

Despite an upbeat Q1, GE stock plummeted over 10% following the earnings release. This can be attributed to the company’s management remarks on the current headwinds. It expects supply-chain issues, the impact of rising Covid-19 cases in China, and the Ukraine crisis to weigh on its overall performance in the coming quarters. While GE did not change its earnings guidance for the full year, it now expects it to fall toward the lower end of the provided range. The outlook didn’t sit well with the investors, weighing on its stock.

Now that GE has seen a fall of 15% in a month, will it continue its downward trajectory, or is a rise imminent? Going by historical performance, there is a higher chance of even lower levels for GE stock over the next month. Of 99 instances in the last ten years that GE stock saw a twenty-one-day fall of 15% or more, only 32 resulted in GE stock rising over the subsequent one-month period (twenty-one trading days). This historical pattern reflects 32 out of 99, or about a 32% chance of a rise in GE stock over the coming month. See our analysis of General Electric Stock Chance of Rise for more details.

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Calculation of ‘Event Probability‘ and ‘Chance of Rise‘ using last ten years’ data

  • After moving -14% or more over five days, the stock rose on 32% of the occasions in the next five days.
  • After moving -13% or more over ten days, the stock rose on 32% of the occasions in the next ten days.
  • After moving -15% or more over a twenty-one-day period, the stock rose on 32% of the occasions in the next twenty-one days.

This pattern suggests a higher chance of a fall in GE stock over the next five days, the next ten days, and the next month.

General Electric (GE) Stock Return (Recent) Comparison With Peers

  • Five-Day Return: LMT highest at -2%; GE lowest at -14%
  • Ten-Day Return: HON highest at -2%; GE lowest at -13%
  • Twenty-One Day Return: LMT highest at 0%; GE lowest at -15%

While GE stock may see lower levels, the Covid-19 crisis has created many pricing discontinuities, which can offer attractive trading opportunities. For example, you’ll be surprised how counter-intuitive the stock valuation is for Ashland vs. Microsoft.

What if you’re looking for a more balanced portfolio instead? Our high-quality portfolio and multi-strategy portfolio have beaten the market consistently since the end of 2016.

Returns Apr 2022
MTD [1]
YTD [1]
Total [2]
 GE Return -15% -18% -68%
 S&P 500 Return -8% -12% 87%
 Trefis Multi-Strategy Portfolio -7% -14% 237%

[1] Month-to-date and year-to-date as of 4/29/2022
[2] Cumulative total returns since the end of 2016

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