General Electric stock (NYSE: GE) has been soaring, doubling in the past year from $90 per share in September 2023 to $190, driven by strong business fundamentals and Aerospace revenue growth. Is the uptrend sustainable?

Peak or Potential for Growth?

Despite fair valuation at current prices, GE could potentially double in value over the next few years, supported by a 45% increase in net income in 2023. Analysts project a 40% annual earnings growth, envisioning a climb to $400 per share fueled by revenue growth and promising margins.

Is GE Stock Appealing Now?

GE’s stock performance against the S&P 500 has been volatile. While 2023 saw a 94% stock growth, GE underperformed the S&P in 2021. Considering the uncertain economic and geopolitical landscape, the stock’s future relative to the index remains uncertain.

Key for Growth: Revenue and Margins

GE’s potential to increase earnings by 40% hinges on consistent revenue growth and improved margins. If earnings double in the coming years, maintaining the Price-to-Earnings (P/E) ratio could propel the stock to hit $380, offering investors a profitable scenario.

Doubling in value seems plausible in the near future for GE. Whether achieved in one or two years, sustained revenue and earnings growth will be the key to GE’s stock performance.

[1] Returns as of 10/01/2024
[2] Cumulative total returns since the end of 2016

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.