E General Electric Looks Set For Another Breakout

Shares of the global conglomerate company General Electric (GE) are up 8% following a 13% plunge early last week. The company has gained more than 113% in market value since September last year making it one of the best mega-cap performers over the same period.

Despite the company’s recent pullback in stock price, General Electric looks set for another breakout which could see its stock price hit a new 3-year high. It hit a high of $18.76 at the start of 2018.

General Electric rose momentarily to trade at $14.42 at the start of this month but has since pulled back to settle at around $13.35. A stretch towards the $15.00 level will put it above $14.97, which it last hit in May 2018.

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At the current price of $13.35, General Electric is trading at a trailing price-earnings ratio of just 22.32, which is reasonably attractive for such a quality stock. General Electric’s earnings are expected to grow rapidly over the next five years. Its PEG ratio (5-years expected) of 0.17 makes it one of the top-quality stocks to watch going into the second quarter of the calendar year. 

A look at growth catalysts

General Electric’s largest business, the aviation segment is bound to return to pre-pandemic levels following the successful rollout of the covid-19 vaccine. The company’s airplane engine manufacturing business is tipped to peak again after a slowdown caused by country lockdowns and travel restrictions. Engine repairs could also help boost General Electric’s top line in the coming months.

Another catalyst for the shares of the Boston, MA-based company comes from the rapidly growing electric vehicles market. Generally, as the world continues to shift towards environmentally-friendly vehicles, the demand for electricity will rise. This will boost the revenue potential for the company. A Bloomberg report from last year predicted that electric vehicles will account for at least 58% of all passenger vehicles and 31% of all cars by the year 2040. 

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Disclosure: The material appearing on this article is based on data and information from sources I believe to be accurate and reliable. However, the material is not guaranteed as to accuracy nor does ...

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