In October-December, General Electric Co. (GE) shares saw solid growth, but are still cheaper than in the previous year. This provides an opportunity in 2021 for expansion. Would it be possible for General Electric to know that?
Industrial firms, such as General Electric, are commonly valued by the cash balance that generates interest payments, repurchases of securities, or payments of dividends. It is anticipated that all four main GE market segments will see growth this year.
The key positive driver in the aviation market is the recovery of air traffic. A large-scale COVID-19 vaccine has already been started and air travel will partly restore passenger traffic soon. Around the same time, GE’s profits from aircraft engine purchases, repair services, aircraft leasing, etc. will rise.
Development could grow to mid-single digits in the healthcare solutions market in 2021, with cash flow in excess of $1 billion. Dynamics in the industrial solutions market are unlikely to change much, but the renewable energy transformation pattern will continue. This trend is controversial for GE, as it slows down sales of fossil energy units. At the same time, GE is following market developments and currently has the position of a pioneer in the heavy-duty wind farm business. General Electric provides the world’s most efficient mass-produced wind turbines, capable of producing up to 12 MW of electricity.
GE has shown heterogeneous cash flow patterns in multiple segments over the past few years. The estimation of this indicator is however also difficult. The most ambitious estimate predicts that in fiscal year 2022, GE’s free cash flow will be up to $6 billion. The consensus estimate on Wall Street is $3.6 billion.
General Electric Company (GE) was stable by slightly rising +0.62% to end the weekend session at $11.34. Market capitalization of the company currently stands at about $98 billion.