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General Electric (GE) shares were trading around $10.71 in the after-hours session, having dropped by approximately 0.56%.
As the fiscal year 2020 comes to an end, General Electric Co (NYSE: GE) investors and leadership are optimistic that come next year things will be different. Although GE stock has jumped approximately 72.32% in the past three months, in respect to the past one year they are down approximately 3.75%.
General Electric’s market outlook is dictated by different sectors that the company has diversified over the years. At the top is the aviation segment followed closely by the GE capital, healthcare and the renewable energy sector. Over the years, poor management that culminated in huge debts and increased competition have made General Electric feel the market pressure.
Mind you, its market perspective has been worsened by the ongoing coronavirus pandemic that has grounded most businesses including the air industry that the company heavily relies on.
General Electric (GE) Stock and Market Performance
General Electric market scenario has largely been deciphered by JPMorgan analyst Stephen Tusa. According to Tusa, the declining free cash flow (FCF) and low demand has triggered the multiyear fall in GE stock. Notably, the GE aviation segment is a huge supplier of aircraft engines to Boeing Co (NYSE: BA) and also Airbus SE (OTCMKTS: EADSY).
Recently, Boeing’s latest flagship, the 737MAX was cleared by the United States FAA after two years of being grounded. The two years significantly affected General Electric earnings as depicted by its quarterly earnings results.
The company is currently working on improving its organic orders that have been downshifted by the coronavirus crisis. In addition, General Electric noted in its Q3 results that it expects its cash flow to improve in the coming quarters.
“We are improving our profit and cash performance with organic margin expansion in every segment except Aviation, though orders more broadly remain under pressure,” GE Chairman and CEO H. Lawrence Culp, Jr. noted.
“While our work continues, GE’s transformation is accelerating, and we expect Industrial free cash flow to be at least $2.5 billion in the fourth quarter and positive in 2021. We remain focused on unlocking upside potential for the long term,” he added.
General Electric analysts and investors are closely monitoring the coronavirus crisis and vaccine development. With a viable vaccine expected to be approved by the end of the first half of 2021, a vibrant second half is likely to materialize.
Furthermore, GE shares are trading on multiyear lows and likely to experience a market rebound based on speculation. Mind you the company is slowly morphing to match with the changing market demand and technology advancement.
General Electric (GE) stock was trading around $10.71 in the after-hours, having dropped approximately 0.56%. The market data provided by MarketWatch indicates the company has a market valuation of around $94.69 billion with 8.76 billion outstanding shares.