General Electric (GE) eyes a future as an aviation and defense pure play, shedding its diversified conglomerate past. Is GE stock a buy after soaring to multi-year highs, with earnings due?
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GE News
The industrial giant plans to spin off its energy business as GE Vernova in early 2024. That will allow the “new GE,” GE Aerospace, the company’s jet-engine business, to emerge as a stand-alone company.
The aerospace unit is benefiting from a recovery in commercial air travel.
Its health care spinoff, GE HealthCare Technologies (GEHC), debuted on the Nasdaq in January. General Electric had announced a three-way breakup — into independent power, health care and aviation companies — in 2021. Prior to that, it shed a series of assets, from lighting to locomotives.
Industrial companies are grappling with supply-chain issues and macro uncertainties. Other headwinds include the rapid rise in inflation and the Russia-Ukraine war.
GE Stock’s Huge Rally
GE stock cleared a 108.90 buy point at the end of June . The entry from a three-weeks-tight pattern offered a place for existing investors to add a few more shares. The stock is within buy range, which goes to 114.35.
It remains above the 21-day exponential moving average as well as longer-term averages. Shares have risen every month in 2023 so far and sit at a five-year-plus high.
Year to date, GE stock has soared 70%, including an 11.5% jump in the past three months. It has more than doubled from its Sept. 30, 2022 low of 48.29.
The relative strength line has flattened out after a strong rally. A rising RS line means that a stock is outperforming the S&P 500. It is the blue line in the chart shown.
The industrial giant earns an IBD Composite Rating of 88 out of 99, according to the IBD Stock Checkup tool. The rating combines key technical and fundamental metrics in a single score.
General Electric owns an RS Rating of 96, meaning it has outperformed 96% of all stocks in IBD’s database over the past year.
GE remains a popular stock on Wall Street. As of June, 1,922 funds owned shares.
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