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General Electric Q2 Preview: Can Shares Find New Energy?
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Earnings season is always a thrilling time to be an investor. Market participants get backstage access to companies’ quarterly results, providing a clearer image of what has transpired behind the scenes.
Now that things are kicking into high gear, we have a surplus of companies reporting quarterly results daily. One company slated to release quarterly results before the opening bell next Tuesday, July 26th, is General Electric (GE - Free Report) .
General Electric’s services and products range from jet engines, airframes, and energy production solutions to offshore wind turbines, technologies in medical imaging, and leasing and financing services. Simply put, we see their products everywhere.
The company is currently a Zacks Rank #3 (Hold) with an Earnings ESP Score of -18%.
How does the company shape up heading into its quarterly release? Let’s take a look.
Share Performance & Valuation
Year-to-date, sellers have been in control, with GE shares declining nearly 30% in value and underperforming its Zacks Sector by a fair margin.
Image Source: Zacks Investment Research
Upon widening the timeframe to encompass a year’s worth of share performance, the story remains the same – GE shares have struggled to find an uptrend, losing approximately a third of their value.
Image Source: Zacks Investment Research
General Electric sports a 0.9X forward price-to-sales ratio, a tick below its five-year median of 1.1X and nicely below its high of 1.8X in late 2017. In addition, the value represents a 72% discount relative to the S&P 500’s value of 3.3X.
GE has a Style Score of a C for Value.
Image Source: Zacks Investment Research
Quarterly Estimates
Analysts have been bearish as of late, with two negative estimate revisions hitting the tape over the last 60 days. The $0.38 per share Zacks Consensus Estimate reflects a 5% decrease in quarterly earnings year-over-year.
Image Source: Zacks Investment Research
In addition, top-line projections display some softening as well. General Electric is forecasted to rake in $17.9 billion in revenue, a slight 2% decline from year-ago quarterly sales of $18.3 billion.
Quarterly Performance & Share Reactions
GE has recently been on an impressive earnings streak, exceeding bottom-line estimates in each of its previous five quarters. In its latest quarter, the company recorded a 20% double-digit bottom-line beat.
However, quarterly revenue results have left much to be desired; over its last ten quarterly reports, the company has exceeded revenue estimates just five times.
The chart below illustrates the company’s revenue on a quarterly basis.
Image Source: Zacks Investment Research
As of late, the market has reacted poorly to the company’s EPS beats – over its last five bottom-line beats, shares have moved upwards just once.
Bottom Line
General Electric’s top and bottom-line are forecasted to decline marginally, share performance has been disheartening, and the market has reacted poorly to bottom-line beats as of late.
In addition, the company carries an Earnings ESP Score of -18% heading into the quarterly release.
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General Electric Q2 Preview: Can Shares Find New Energy?
Earnings season is always a thrilling time to be an investor. Market participants get backstage access to companies’ quarterly results, providing a clearer image of what has transpired behind the scenes.
Now that things are kicking into high gear, we have a surplus of companies reporting quarterly results daily. One company slated to release quarterly results before the opening bell next Tuesday, July 26th, is General Electric (GE - Free Report) .
General Electric’s services and products range from jet engines, airframes, and energy production solutions to offshore wind turbines, technologies in medical imaging, and leasing and financing services. Simply put, we see their products everywhere.
The company is currently a Zacks Rank #3 (Hold) with an Earnings ESP Score of -18%.
How does the company shape up heading into its quarterly release? Let’s take a look.
Share Performance & Valuation
Year-to-date, sellers have been in control, with GE shares declining nearly 30% in value and underperforming its Zacks Sector by a fair margin.
Image Source: Zacks Investment Research
Upon widening the timeframe to encompass a year’s worth of share performance, the story remains the same – GE shares have struggled to find an uptrend, losing approximately a third of their value.
Image Source: Zacks Investment Research
General Electric sports a 0.9X forward price-to-sales ratio, a tick below its five-year median of 1.1X and nicely below its high of 1.8X in late 2017. In addition, the value represents a 72% discount relative to the S&P 500’s value of 3.3X.
GE has a Style Score of a C for Value.
Image Source: Zacks Investment Research
Quarterly Estimates
Analysts have been bearish as of late, with two negative estimate revisions hitting the tape over the last 60 days. The $0.38 per share Zacks Consensus Estimate reflects a 5% decrease in quarterly earnings year-over-year.
Image Source: Zacks Investment Research
In addition, top-line projections display some softening as well. General Electric is forecasted to rake in $17.9 billion in revenue, a slight 2% decline from year-ago quarterly sales of $18.3 billion.
Quarterly Performance & Share Reactions
GE has recently been on an impressive earnings streak, exceeding bottom-line estimates in each of its previous five quarters. In its latest quarter, the company recorded a 20% double-digit bottom-line beat.
However, quarterly revenue results have left much to be desired; over its last ten quarterly reports, the company has exceeded revenue estimates just five times.
The chart below illustrates the company’s revenue on a quarterly basis.
Image Source: Zacks Investment Research
As of late, the market has reacted poorly to the company’s EPS beats – over its last five bottom-line beats, shares have moved upwards just once.
Bottom Line
General Electric’s top and bottom-line are forecasted to decline marginally, share performance has been disheartening, and the market has reacted poorly to bottom-line beats as of late.
In addition, the company carries an Earnings ESP Score of -18% heading into the quarterly release.