Breaking Down The Bullish Case For General Electric: Analyst Calls For 36% Upside Potential

General Electric Company GE, the multinational conglomerate that operates in various high-tech industrial capacities, is showing promising signs of growth, says Benzinga’s Gianni Di Poce.

According to Di Poce’s analysis in his weekly Benzinga Pro Insider Report, the stock has 36% upside potential from current levels, which could potentially yield market-beating returns for investors.

The GE Analyst: Di Poce said he’s bullish on GE, as long as the stock stays above $81, and set a high-end price target of $135.

Check out GE's analyst ratings here.

Di Poce said that while GE's price-to-earnings ratio is high, the company's price-to-sales ratio is reasonable, and its renewable energy and aerospace divisions are expected to see significant growth in 2023.

The company's aerospace segment is crucial to its business, and its performance exceeded expectations in 2022, generating $4.9 billion, beating estimates of $4.8 billion. GE expects deliveries for its aerospace business to increase by 50% in 2023.

The analyst added that GE’s renewable energy division is expected to grow across all three fronts, including onshore wind, offshore wind and grid in 2023. Onshore orders increased by more than double in the fourth quarter last year in North America.

GE has a large free quarterly cash flow of $4.43 billion, and the company is keen on returning capital to shareholders, with a payout ratio of over 60%.

Additionally, GE recently settled a patent dispute over wind turbine technology with Siemens Gamesa Renewable Energy GCTAF, and the company announced a collaboration with Svante to develop a carbon capture technology for power generation.

From a charting perspective, GE is starting to break out from an ascending triangle formation, which often leads to a continuation of a stock's bull trend. Morgan Stanley rates GE as Overweight, while Oppenheimer rates it as Outperform, and Goldman Sachs rates it as a Buy.

Price action: Shares of GE are trading 0.39% lower to $93.88 Thursday morning, according to data from Benzinga Pro.

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Photo: Chuck Miller via Flickr Creative Commons