General Electric (GE): Is There Further Upside After a 85% Share Price Rally?

General Electric (GE) shares have seen a steady climb this year, outpacing the broader market. Investors appear to be considering the company’s consistent revenue and income growth, which continues to shape its longer-term outlook.

See our latest analysis for General Electric.

With a year-to-date share price return of over 85%, General Electric’s impressive rally has turned heads. Momentum is clearly building, fueled by a combination of renewed growth optimism and the company’s strong track record, reflected in a remarkable 555% total shareholder return over the past three years.

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But with shares trading near recent highs, the critical question for investors is whether GE’s current valuation leaves room for further upside or if the market has already factored in all the future potential.

Most Popular Narrative: 4.4% Undervalued

With General Electric’s fair value estimate sitting above its last close price, bullish sentiment is emerging around the stock’s future prospects. The narrative highlights catalysts that are powering forward expectations for growth and margins.

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 has the potential to positively impact long-term revenue and earnings growth.

Read the complete narrative.

Want to know what underpins this optimism? There is a bold outlook for both revenue and profit expansion, plus a future earnings multiple that is above the industry standard. Which financial assumptions do analysts believe will power the next leg higher? See what numbers support their surprisingly confident fair value forecast.

Result: Fair Value of $327.29 (UNDERVALUED)

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

However, persistent supply chain pressures or a slowdown in commercial aviation demand could quickly challenge the optimistic assumptions behind GE's strong growth outlook.

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

Another View: Is the Valuation Stretching Too Far?

While bullish forecasts center on future growth, a look at today’s price-to-earnings ratio offers a reality check. GE trades at 41 times earnings, which is not only above the industry average of 40.9x but also much higher than the peer group’s 26.8x and the fair ratio of 35.1x. That steep premium signals investors might be paying up for the outlook. At what point could sentiment shift if expectations continue to rise?

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

Build Your Own General Electric Narrative

If you see the story differently or want your own take on the numbers, you can craft a custom view using the same data in just minutes, so Do it your way.

A great starting point for your General Electric research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.

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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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