General Electric Co Retains Buy Recommendation

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

NEW YORK ( TheStreet) -- General Electric (NYSE: GE) has been reiterated by TheStreet Ratings as a buy with a ratings score of B. The company's strengths can be seen in multiple areas, such as its expanding profit margins, increase in stock price during the past year, notable return on equity and increase in net income. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

Highlights from the ratings report include:
  • The gross profit margin for GENERAL ELECTRIC CO is rather high; currently it is at 52.94%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 8.94% is above that of the industry average.
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
  • GENERAL ELECTRIC CO's earnings per share declined by 8.8% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, GENERAL ELECTRIC CO increased its bottom line by earning $1.38 versus $1.24 in the prior year. This year, the market expects an improvement in earnings ($1.66 versus $1.38).
  • GE, with its decline in revenue, slightly underperformed the industry average of 3.9%. Since the same quarter one year prior, revenues slightly dropped by 2.7%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • The company, on the basis of net income growth from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and the Industrial Conglomerates industry average. The net income increased by 0.9% when compared to the same quarter one year prior, going from $3,105.00 million to $3,133.00 million.

General Electric Company operates as an infrastructure and financial services company worldwide. General Electric has a market cap of $244.4 billion and is part of the industrial goods sector and industrial industry. Shares are up 14.1% year to date as of the close of trading on Friday.

You can view the full General Electric Ratings Report or get investment ideas from our investment research center.

--Written by a member of TheStreet Ratings Staff.

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