General Electric (GE): Evaluating Valuation After Labor Deal Secures Stability and Strong Analyst Optimism

General Electric (GE) recently settled a five-year labor agreement with UAW workers at its Ohio and Kentucky distribution facilities, closing out a three-week strike. This deal removes short-term uncertainty and offers investors some relief and clarity on operational stability.

See our latest analysis for General Electric.

GE’s share price has sustained a wave of momentum, climbing 76.5% year-to-date on the back of strong aerospace demand, improving operations, and headline moves such as bringing industry veteran Wesley Bush onto the board. Over the long term, holders have enjoyed a remarkable 738% total shareholder return over five years, which signals that confidence in GE’s turnaround is still building.

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With analyst price targets inching higher and optimism running strong, the key question for investors now is whether all of GE’s future growth is already reflected in the soaring share price, or if there is still untapped value left for buyers.

Most Popular Narrative: 4.1% Undervalued

General Electric’s current share price sits just below the narrative’s fair value estimate, with analysts seeing more upside ahead. The narrative sets a tone of optimism, bolstered by commercial demand and expectations of future earnings growth.

Acceleration of next-generation engine programs (such as 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 could positively impact long-term revenue and earnings growth.

Read the complete narrative.

Want to know what powers this bullish outlook? Hidden behind the headline valuation are bold forecasts about new technologies and powerful financial gains. The narrative reveals the specific levers and future milestones that could justify a much higher market cap. Unlock the full story and see what the analysts are really banking on.

Result: Fair Value of $310.14 (UNDERVALUED)

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

However, supply chain disruptions or a long-term slowdown in commercial air travel could quickly challenge even the most bullish outlook for GE's aerospace momentum.

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

Another View: Multiples Tell a Cautionary Story

While the fair value estimate sees upside for General Electric, a look at the company’s current price-to-earnings ratio, at 41.6x, offers a different message. It is pricier than its peer average (26.8x), the US Aerospace & Defense industry average (39.8x), and above where the market’s fair ratio could land (35.3x). This premium means investors are betting future results will justify the high bar set by the market, so what happens if growth slows?

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 into the numbers yourself, crafting your own in-depth take on GE is easy and takes just a few minutes. 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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