Is GE’s Stock Price Justified After Spin-Off and 77% Surge in 2025?

• Thinking about whether General Electric's stock is a hidden bargain or looking a bit stretched? Let's take a closer look at what is really driving its value right now.
• The share price has surged, gaining 77.0% year-to-date and rising 64.9% over the past year, even though it dipped 5.0% in the last month.
• Much of the market movement has been supported by news of GE's successful spin-off of its energy division, GE Vernova, as the company sharpens its focus on aviation and healthcare. This strategic shift has kept investors alert, as they watch to see if GE’s leaner business model will lead to sustained momentum.
• But when it comes to valuation, General Electric's current score is 0 out of 6, which suggests that traditional metrics find it fully valued on all fronts. Before drawing any firm conclusions, let's walk through how this score compares across common valuation approaches and highlight another way of thinking about value at the end.

General Electric scores just 0/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: General Electric Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model estimates a company's value by projecting its future cash flows and then discounting them back to today’s dollars. This approach provides a forward-looking perspective rather than relying solely on accounting-based profits.

For General Electric, analysts estimate Free Cash Flow for the last twelve months at approximately $6.45 billion. Projections suggest that by 2029, annual Free Cash Flow could reach $10.59 billion, with further increases expected in the years ahead, drawing on both analyst forecasts and extrapolations. Simply Wall St’s model reflects a generally strong upward trend, signaling solid confidence in the company's core businesses.

Based on the 2 Stage Free Cash Flow to Equity model, the calculated intrinsic value for General Electric shares is $220.99. However, comparing this with today’s market price, the stock currently trades at a 35.1% premium to its DCF fair value. This suggests investors have already priced in high growth expectations, and the shares may not represent a bargain from a pure cash flow perspective.

Result: OVERVALUED

Our Discounted Cash Flow (DCF) analysis suggests General Electric may be overvalued by 35.1%. Discover 921 undervalued stocks or create your own screener to find better value opportunities.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for General Electric.

Approach 2: General Electric Price vs Earnings (P/E)

The price-to-earnings (P/E) ratio is often regarded as the go-to valuation metric for profitable companies like General Electric because it links a company's current share price to its per-share earnings. For investors, this simplifies comparisons and offers quick insight into how much the market is willing to pay for each dollar of earnings.

Interpreting a fair P/E ratio depends not only on a company’s recent results, but also on expected growth and risk levels. Companies with higher expected profit growth or lower risk can justify higher P/E ratios, while the reverse holds for slower or more volatile businesses.

General Electric is currently trading at a P/E of 39.1x. For context, the average P/E among its peers is 25.6x, while the Aerospace & Defense industry as a whole averages 38.3x. These comparisons suggest that GE’s valuation is a notch above its closest competitors, but still well aligned with wider industry expectations.

Simply Wall St’s Fair Ratio for GE currently stands at 35.9x. Unlike peer or sector averages, this proprietary benchmark weighs factors like the company’s earnings trajectory, risk profile, profit margins, industry, and size, providing a more tailored view of what multiple GE deserves.

With General Electric’s real P/E at 39.1x and its Fair Ratio at 35.9x, the difference is only about 3.2x. This puts its valuation just a little above the “about right” range, which suggests that GE is trading at a modest premium, but not wildly overpriced.

Result: OVERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1438 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your General Electric Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives. A Narrative is a clear, straightforward way to connect your view of a company’s story with your own financial assumptions, such as what you think about General Electric’s future revenue, earnings, and profit margins. This helps you work out what its fair value should be.

Unlike traditional valuation models that focus on the numbers alone, a Narrative invites you to combine your perspective with real forecasts and then instantly see how your expectations measure up against the current market price. The Simply Wall St platform, used by millions, makes this easy by letting you build, track, and adjust Narratives on the Community page.

Narratives help guide buy and sell decisions by showing in real time how your estimated fair value stacks up against the latest price. Additionally, they respond dynamically whenever news, earnings, or industry updates arrive, keeping your view up to date. For example, some investors think GE shares are worth as much as $343.00 per share based on accelerating aerospace growth, while others put fair value as low as $266.00, citing risks like industry cycles and supply chain inflation. With Narratives, you can create and update your own story in just a few clicks and see how your outlook compares to the crowd, making smarter investment decisions simple and accessible.

Do you think there's more to the story for General Electric? Head over to our Community to see what others are saying!

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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