General Electric (GE) reports Q4 earnings early Tuesday as the conglomerate approaches its conversion to a pure-play aerospace company. GE stock rose Monday, extending further from a buy zone after a mid-November breakout.
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TD Cowen in a research note last Tuesday said it expects mostly in-line results from GE. But strong Department of Defense funding and demand for Flight Management Systems (FMS) and munitions replacement could bolster defense revenues.  TD Cowen lifted its price target on General Electric to $130 from $120 and maintained an outperform rating on the shares.
Elsewhere, Wells Fargo forecasts long-term margin upside for the company with a built-in catalyst from the Vernova spinout in early Q2, according to a mid-December research note. Analyst Matthew Akers expects adjusted earnings growth in the high-teens for GE excluding Vernova over the next few years, driven by double-digit organic sales. Akers also pointed to GE’s “solid” management team and “clean” balance sheet, calling it an “attractive business with high aftermarket mix.” Wells Fargo upgraded GE stock to overweight from equal weight and raised its price target to $144 from $115.
Is GE Stock A Buy? Here’s What General Electric Earnings, Charts Show
GE Earnings
FactSet forecast adjusted earnings will fall 28% to 89 cents per-share to mark the first drop in four quarters. Analysts see revenue declining 18.2% to $17.18 billion after four quarters of accelerating gains.
The company is coming off a major beat-and-raise earnings report for Q3 in October, driven by strength in its commercial aerospace business.
Third-quarter earnings came in at 82 cents per share, compared to a loss of 17 cents the year prior, while sales increased 18% to $16.5 billion. GE Aerospace profits for the quarter jumped 33% and revenue surged 25%.
Meanwhile, GE is preparing to break out its power and renewables business as GE Vernova in the beginning of the second quarter. The remaining operations will receive the GE Aerospace title. The company’s health care spinoff, GE HealthCare Technologies (GEHC), debuted on the Nasdaq last January.
GE Stock
General Electric rose 1.2% Monday ahead of earnings. GE stock is extended above a buy zone for a flat base after a mid-November breakout.
You can follow Harrison Miller for more stock news and updates on X/Twitter @IBD_Harrison
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