Analyst: GE Stock May Be Poised to Climb

General Electric Co. (GE) stock has lagged the Standard & Poor’s 500 index for more than a decade. But after years of frustration, GE investors may now be on the cusp of an extended period of outperformance.

According to William Blair analyst Nicholas Heymann, GE’s share price is currently a “coiled spring.” GE stock could soon make a major push higher to relieve that tension.

Heymann says GE’s forecasted margin expansion and the long-term growth potential of GE Digital are not yet priced into the stock.

GE Digital is the new software segment of GE’s business created in 2015. GE Digital will compete with rivals such as International Business Machines (IBM) in the nascent Internet of Things market and is well-positioned to benefit from President Donald Trump’s proposed federal infrastructure spending.

“Key external catalysts only represent potential upside to GE’s and consensus expectations,” Heymann says. “GE’s transformational GE Digital business continues to gain fundamental traction, allowing GE’s 2018 Predix data analytics contribution of $200 million to appear very conservative.”

Heymann says GE’s merger-spinoff deal with oil services giant Baker Hughes (BHI) and its $10 billion buyout of Alstom Energy were shrewd long-term business ideas and well-timed deals. The Baker Hughes deal positions GE to capitalize on the early stages of a recovery in the U.S. oil and gas industry within two years.

Finally, after such an extended period of underperformance, market expectations for GE are extremely low. Heymann says investors are skeptical GE can meet its organic sales growth guidance for 2017. That skepticism limits the potential downside for GE stock in the near-term if the company fails to deliver.

“Despite concerns over the pace of revenue growth acceleration, GE remains…

Click here to continue reading

Want to learn more about how to profit off the stock market? Or maybe you just want to be able to look sophisticated in front of your coworkers when they ask you what you are reading on your Kindle, and you’d prefer to tell them “Oh, I’m just reading a book about stock market analysis,” rather than the usual “Oh, I’m just looking at pics of my ex-girlfriend on Facebook.” For these reasons and more, check out my book, Beating Wall Street with Common SenseI don’t have a degree in finance; I have a degree in neuroscience. You don’t have to predict what stocks will do if you can predict what traders will do and be one step ahead of them. I made a 400% return in the stock market over five years using only basic principles of psychology and common sense. Beating Wall Street with Common Sense is now available on Amazon, and is always available on your local internet!