It’s not often though of as a growth stock, but General Electric (GE) made it to IBD’s screen of Rising Profit Estimates. The stock has formed a four-weeks-tight pattern, a bullish formation that builds support for a possibly strong move.
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The pattern offers a buy point at 103.05. It is the first potential buy area since shares broke out of a long, deep cup with handle in January. Shares hit the 25% profit target in April.
An ascending 50-day moving average and rising relative strength line are other bullish indicators on GE’s chart, according to IBD MarketSmith. In fact, the relative strength line has risen to a 52-week high. The stock is up a staggering 55% so far this year, compared with the S&P 500’s 8% gain.
Strong Growth Estimates Power Stock
The growth stock had a strong first quarter, with sales of $14.5 billion. That was a 14% increase from the previous year. Earnings per share of 27 cents showed a strong turnaround from a loss during the same period.
The industrial leader also spun off GE HealthCare (GEHC) during the quarter as the newfangled growth stock streamlined its business in aerospace and renewable energy.
GE HealthCare went public on Jan. 4 and lists on the Nasdaq under the GEHC symbol. Shareholders received one GEHC share for every three GE shares. The nearly 150-year old General Electric has made other spinoffs in the past, including its iconic lighting business in 2020.
The company plans on splitting its aerospace and energy businesses in 2024 into GE Aerospace and GE Vernova.
Wall Street estimates a 93% spurt in earnings in 2024, with earnings of $3.96 for the fiscal year, up from $2.05 for fiscal 2023.
The Boston-based company raised the lower end of its prior guidance for the full year with earnings per share of $1.70-$2, up from $1.60-$2. Estimates for free cash flow of $3.6 billion-$4.2 billion were also up from earlier views of $3.4 billion-$4.2 billion.
GE Chairman and CEO Lawrence Culp noted that the company had its ” first positive free cash flow in the first quarter in nearly a decade.”
Growth Stock Shows Off Technical Ratings
General Electric has a Composite Rating of 91, a robust Relative Strength Rating of 97 and a weaker EPS Rating of 73. Mutual funds own 48% of shares outstanding. The growth stock also has an Accumulation/Distribution Rating of B, which shows institutional interest.
GE ranks third in the diversified operations industry group, which holds 91st place among IBD’s 197 industry groups. The company traces its roots back to Thomas Edison and boasts several firsts, such as lighting the first night game for major league baseball in 1935.
Mutual funds with the growth stock include the Fidelity Contrafund (FCNTX). Exchange traded funds holding it include Industrial Select Sector SPDR ETF (XLI) and the Invesco Aerospace & Defense ETF (PPA).
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