Shares of multinational conglomerate General Electric (GE) closed 1.2% higher on Tuesday after the company delivered strong financial results for the second quarter of 2021, driven by growth across all its business segments.
Based out of Massachusetts, General Electric provides technologies and solutions to the locomotive, additive manufacturing, renewable energy, power, healthcare, aviation and digital industries. It also offers leasing and financial underwriting services.
Adjusted earnings per share (EPS) stood at $0.05, beating the Street’s estimate of $0.04. The company had reported a loss of $0.14 per share in the second quarter of 2020. Total revenues increased 9% year-over-year to $18.3 billion, marginally surpassing analysts’ expectations of $18.13 billion.
Aviation revenues grew 10% year-over-year to $4.8 billion; Healthcare revenues rose 14% to $4.5 billion; Renewable Energy revenues climbed 16% to $4.1 billion; and Power revenues went up 3% to $4.3 billion. (See General Electric stock chart on TipRanks)
The Chairman and CEO of General Electric, H. Lawrence Culp, Jr., said, “With our focus on profitable growth and cash generation, I am confident we are well-positioned to achieve high single-digit free cash flow margins over time.”
For 2021, the company reiterated its adjusted EPS outlook of $0.15 to $0.25.
Last week, UBS analyst Markus Mittermaier reiterated a Buy rating on the stock with a price target of $17 (30% upside potential).
Ahead of the second-quarter results, the analyst said, “Although it seems the market is expecting a step down in margins, as guided by the company, we believe there is a downside to consensus.”
Overall, the stock has a Strong Buy consensus based on 7 Buys and 2 Holds. The average General Electric price target of $15.71 implies 20.1% upside potential to current levels. Shares of the company have gained nearly 90% over the past year.
According to TipRanks’ Smart Score rating system, General Electric scores a “Perfect 10,” suggesting that the stock is likely to outperform market averages.
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