By Aerospace and power generation giant, General Electric (ticker: GE), has received a downgrade from Oppenheimer analyst Christopher Glynn. Despite this, the stock remains relatively unaffected in early trading, reflecting the prevailing strong investor sentiment.
Glynn’s downgrade moves GE stock from a Buy to a Hold rating, primarily due to valuation concerns. He emphasizes that recent gains are fundamentally based. It is worth noting that Glynn initially upgraded the stock in late 2020 when GE shares, adjusted for the GE HealthCare Technologies (GEHC) spinoff, were priced around $70. As of Friday’s close, GE shares were valued at $114.39.
Surprisingly, the market seems unperturbed by the downgrade. In premarket trading on Monday, GE stock increased by approximately 0.2%, while S&P 500 and Dow Jones Industrial Average futures experienced a similar upward trend at about 0.1%.
Despite the downgrade, a significant percentage of analysts covering GE shares still rate them as Buy (approximately 60%). This figure exceeds the average Buy-rating ratio for stocks in the S&P 500, which stands at around 55%.
Analysts’ average price target for GE stock hovers around $125 per share. Over the past few days, this target has climbed by approximately $14 per share compared to the previous value of around $111. The release of better-than-expected second-quarter results was well received by both analysts and investors.
GE reported earnings of 68 cents per share from $15.9 billion in sales, surpassing Wall Street expectations of 46 cents per share from sales of $14.8 billion. As a result, GE stock has risen by approximately 4% since reporting these figures on July 25.
As of the beginning of Monday’s trading session, GE shares have soared by approximately 75% year-to-date, showcasing strong performance. Similarly, shares of GE HealthCare Technologies have also experienced positive growth, increasing by approximately 33% in 2023. It is essential to note that GE HealthCare was spun off to GE shareholders earlier this year.
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