NEW YORK (TheStreet) -- General Electric Co. (GE) - Get Report stock is retreating 0.10% to $30.80 in early morning trading on Monday even though the company won a $15.5 billion contract to supply turbines to China Three Gorges's Wudongde hydropower plant.
GE's renewable unit will provide China Three Gorges with six 850-megawatt Francis turbine-generator sets and associated equipment, according to a statement emailed to Bloomberg.
The Chinese government approved the Wudongde Hydropower Station after 18 years of scientific research and preparation, according to a statement by China Three Gorges.
The project will be China's fourth largest hydropower station and the world's seventh largest.
Separately, recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
We rate GENERAL ELECTRIC CO as a Buy with a ratings score of B. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its expanding profit margins and solid stock price performance. We feel its strengths outweigh the fact that the company has had sub par growth in net income.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- 42.21% is the gross profit margin for GENERAL ELECTRIC CO which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 7.95% trails the industry average.
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 3.1%. Since the same quarter one year prior, revenues slightly dropped by 1.1%. Weakness in the company's revenue seems to not be hurting the bottom line, shown by stable earnings per share.
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- GENERAL ELECTRIC CO reported flat earnings per share in the most recent quarter. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, GENERAL ELECTRIC CO reported lower earnings of $1.31 versus $1.47 in the prior year. For the next year, the market is expecting a contraction of 1.5% in earnings ($1.29 versus $1.31).
- The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Industrial Conglomerates industry average. The net income has significantly decreased by 29.1% when compared to the same quarter one year ago, falling from $3,536.00 million to $2,506.00 million.
- You can view the full analysis from the report here: GE