General Electric reaffirmed 2023 financial guidance Thursday and sees expanding margins in the key aviation business after its looming breakup. GE stock spiked to near a five-year high.
During an investor conference Thursday, GE maintained prior 2023 guidance for revenue growth in the high single digits, adjusted EPS of $1.60-$2, and free cash flow (FCF) of $3.4 billion-$4.2 billion.
The company also backed 2023 revenue growth and FCF outlooks for its aviation and energy segments. It continues to expect a profit of $5.3 billion-$5.7 billion for aviation, as well as a loss of $200 million-$600 million for energy.
Simultaneously, management introduced long-term outlooks for GE Aerospace and GE Vernova (housing the power and renewable energy units).
For GE Aerospace, management expects revenue growth in the mid-to-high single digits and continued margin expansion, with free cash flow "in line with net income." The unit is benefiting from the rebound in commercial air travel after the Covid-19 pandemic.
For GE Vernova, management expects growth in the mid single digits and profit margin in the high single digits. GE's renewable energy segment, which will soon be part of Vernova, lost more than $2.2 billion for 2022.
On Thursday, the storied conglomerate reiterated that GE Vernova and GE Aerospace will emerge as standalone, publicly traded companies in early 2024. GE announced its dramatic breakup, into three separate companies, in late 2021.
In early January, GE spun off its health care business, which now trades as GE HealthCare Technologies.
GE Stock, GEHC Stock
Shares of General Electric closed 5.3% higher, at 91.56, on the stock market today. GE stock pegged its highest level since May 2018 intraday after rallying into the investor event. GEHC stock dipped 0.3% to 76.38 Thursday.
GE stock has nearly doubled off a September low. In late January, GE stock topped an 81.28 buy point from a deep cup-with-handle base, the MarketSmith chart shows. Bases more than 33% deep tend to carry added risk. GE's cup is 48% deep.
GE shares are now far extended, meaning they are not in a buy range. The relative strength line for GE stock has risen to highs within a longer-term downtrend.
Year to date, GE stock is up more than 40% vs. a 2.1% gain for the S&P 500.
GEHC stock is up about 27% over the same period.
