The turnaround that General Electric Co. has long been promising its investors is finally coming to fruition as the stock touched an important milestone Thursday.
(Bloomberg) — The turnaround that General Electric Co. has long been promising its investors is finally coming to fruition as the stock touched an important milestone Thursday.
GE shares briefly traded above $100, a key psychological level, for the first time since early 2018. They have been on a tear over the past six months, more than doubling since the end of September, and got a fresh boost last month after the company laid out an “impressive” long-term outlook for its aviation and energy businesses.
“GE’s March 9 investor day showed a much better aerospace outlook versus our prior expectations, and we think is a key catalyst for GE’s re-rating year to date,” BofA analyst Andrew Obin wrote in a note Thursday.
The stock is up 53% this year, and Thursday’s advance capped seven straight sessions of gains.
The last time the shares were this high, back in 2018, the manufacturing behemoth was teetering on the brink of being thrown out of the Dow Jones Industrial Average, despite being an original component of the index and lasting over 110 years. Its struggles with the ailing power and insurance business, wider accounting troubles and related regulatory probes weighed on the company.
From there, the shares entered a prolonged swoon, sinking to a low of about $34 in mid-2020. Even the future of the company’s vaunted aerospace unit appeared shaky in the midst of the pandemic. The stock rose along with the rest of the stock market in 2021, but that fizzled last year.
This move, however, is new. The strength over the past six months flies in the face of a tamer broader market, with GE surging 107% since Sept. 30 while the S&P 500 Index rose 15% and the S&P 500 Industrials Index gained 22%.
Still, GE is far from out of the woods, and the shares reflect the reality that it is now a much smaller and different company than what it was five years back. Despite the latest rally, the stock is still down about 50% from the highs it touched in 2016, before the share price unraveled in the wake of larger problems at the company.
(Updates stock move in second and seventh paragraphs.)
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