A Fresh Look at General Electric (GE) Valuation After Five-Year Total Returns of 776%

General Electric (GE) shares saw a modest move today, drawing attention from investors curious about what is driving recent momentum. With markets focusing on company fundamentals, GE’s performance is sparking fresh evaluation of its long-term value.

See our latest analysis for General Electric.

The momentum behind GE appears to be building, with the share price up over 79% year-to-date and a remarkable 776% total return for shareholders over the last five years. These strong gains reflect renewed confidence in the company's fundamentals and expectations for continued progress following its high-profile business transformations.

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This raises the key question for investors: Is General Electric still undervalued at these levels, or is the stock’s recent strength a sign that the market has already priced in its future growth potential?

Most Popular Narrative: 2.4% Undervalued

General Electric’s last close at $302.68 edges just below the narrative’s fair value estimate of $310.14, reflecting a modest premium in analyst expectations. The latest fair value moves show analysts are incrementally more confident but remain divided about how far GE’s strength can go from here.

Acceleration of next-generation engine programs (like CFM RISE with open fan technology and the GE9X), driven by airline demand for significantly improved fuel efficiency and lower emissions, positions GE to capture incremental orders and technology licensing revenue as decarbonization efforts intensify. This positively impacts long-term revenue and earnings growth. Digitalization and AI integration across MRO and inspection processes (such as AI-enabled Blade Inspection Tools and enhanced digital twins) are increasing operational efficiency, reducing turn times by up to 50%, and enabling predictive maintenance. These advances support higher aftermarket services revenue and margin expansion.

Read the complete narrative.

Curious why the valuation puts so much weight on the future? There is a bold set of projections about revenue, margin expansion, and a premium market multiple that push this target higher. If you want to see which assumptions break the mold—and just how ambitious these financial forecasts really are—you’ll want to dig into the full narrative.

Result: Fair Value of $310.14 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent supply chain pressures or a sudden downturn in commercial aviation demand could quickly challenge the optimistic outlook that is currently priced into GE shares.

Find out about the key risks to this General Electric narrative.

Another View: Is the Market Paying Too Much?

While analyst forecasts suggest General Electric is close to fair value, another perspective raises eyebrows. GE’s current price-to-earnings ratio sits at 42.3x, which is much higher than the industry average of 26.8x and also above its own fair ratio of 35x. This premium could point to valuation risk if expectations do not hold.

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own General Electric Narrative

If you see things differently or want to dive deeper on your own, it's quick and easy to develop your own take. Just a few minutes is all it takes. Do it your way

A good starting point is our analysis highlighting 2 key rewards investors are optimistic about regarding General Electric.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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