Jan 24, 2024
When asked about the stock market’s direction, the most honest answer is usually “up and down.” But why do stocks behave “illogically” after earnings? General Electric beat earnings expectations but saw their stock drop due to disappointing forward guidance. Trading and investing are speculative and always looking forward, making forward guidance a major factor in stock reactions.

Analysts consistently underestimate the job done by GE CEO Larry Culp, with the stock bouncing back after a closer analysis of Q4 results. GE’s turnaround is a quiet success story, with consistent better-than-expected profits and margin improvement overshadowed by the company’s usual disappointing guidance. This morning’s calm analysis is showing promise for a slight recovery.

March 1, 2024
General Electric’s shares have outperformed the Zacks Diversified Operations industry over the last six months (+24.5% vs. -0.7%). The Zacks analyst believes that strength in the company’s aerospace segment, gas power services and growth in grid and onshore wind businesses have been beneficial. The company has also made judicious acquisitions over time.

Yet, high costs and operating expenses, a soft offshore wind business and supply chain disruptions in the defense market continue to remain major headwinds.

Analyst rating