General Electric Shares Get Deutsche Bank Bull Call Based on Sales Catalysts

Sales advances will help GE, the Boston industrial and financial-services giant, top Wall Street's fourth-quarter estimates, Deutsche Bank analysts say.
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General Electric  (GE) - Get Report is expected to beat fourth-quarter earnings expectations Deutsche Bank analysts said in a note.

GE shares at last check were 1.1% higher at $11.80 in Monday trading. They'd fallen more than 2% Friday.

Deutsche Bank expects General Electric to report fourth-quarter earnings of 19 cents a share, topping the consensus analyst estimate of 18 cents. That beat will be driven by quarter-to-quarter improvements within the company’s four business segments.

  • Power-segment sales are expected to increase $26 million, compared with a decline of $144 million in the previous quarter.
  • Renewables sales are expected to increase $322 million, compared with a $98 million decline in the previous quarter.
  • Aviation sales are expected to be $1.79 billion in the fourth quarter, compared with $1.72 billion in the previous period.
  • Healthcare revenue is expected to be $1.22 billion, compared with $970 million in the third quarter.

“It is difficult to identify positive catalysts this quarter, given that sell-side consensus forecasts generally remain too high,” DB’s note said. 

“Despite GE's recent share-price outperformance, we see the potential for a result consistent with our expectation to drive continued upward momentum in the stock price.”

GE shares have risen nearly 40% over the past 12 months.

GE still faces headwinds. The market is looking for an update from management on the impact of the grounding of Boeing’s  (BA) - Get Report 737 MAX on the company as well as concerns about industrial free cash flow.