Earnings Beat: General Electric Company Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

General Electric Company (NYSE:GE) just released its latest annual results and things are looking bullish. The company beat expectations with revenues of US$68b arriving 4.3% ahead of forecasts. Statutory earnings per share (EPS) were US$8.36, 9.1% ahead of estimates. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Check out our latest analysis for General Electric

Taking into account the latest results, the current consensus from General Electric's twelve analysts is for revenues of US$73.5b in 2024. This would reflect a meaningful 8.1% increase on its revenue over the past 12 months. Statutory earnings per share are expected to dive 37% to US$5.11 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$71.1b and earnings per share (EPS) of US$4.75 in 2024. It looks like there's been a modest increase in sentiment following the latest results, withthe analysts becoming a bit more optimistic in their predictions for both revenues and earnings.

Despite these upgrades,the analysts have not made any major changes to their price target of US$144, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic General Electric analyst has a price target of US$165 per share, while the most pessimistic values it at US$120. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. One thing stands out from these estimates, which is that General Electric is forecast to grow faster in the future than it has in the past, with revenues expected to display 8.1% annualised growth until the end of 2024. If achieved, this would be a much better result than the 6.1% annual decline over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 5.5% annually. Not only are General Electric's revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards General Electric following these results. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple General Electric analysts - going out to 2026, and you can see them free on our platform here.

Before you take the next step you should know about the 2 warning signs for General Electric that we have uncovered.

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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.