General Electric operates as an infrastructure and financial services company worldwide. The company's products and services include aircraft engines, power generation, water processing, and household appliances to medical imaging, business and consumer financing and industrial products. The company was founded in 1892 and is based in Boston, Massachusetts.
GE Price Forecast Based on DCF Valuation
DCF Fair Value Target:
The table below illustrates the output of a discounted cash flow forecast using a variety of scenarios for General Electric Co. To summarize, we found that General Electric Co ranked in the 11th percentile in terms of potential gain offered. We should note, though, that all scenearios modelled for this stock suggest it is overvalued. The most interesting components of our discounted cash flow analysis for General Electric Co ended up being:
The company's balance sheet shows it gets 43% of its capital from equity, and 57% of its capital from debt. Notably, its equity weight is greater than merely 23.41% of US equities in the Industrials sector yielding a positive free cash flow.
The company's compound free cash flow growth rate over the past 5.79 years comes in at -0.19%; that's greater than only 10.36% of US stocks we're applying DCF forecasting to.
General Electric Co's interest coverage rate -- a measure of gross earnings relative to interest payments -- comes in at -0.01. This coverage rate is greater than that of only 18.3% of stocks we're observing for the purpose of forecasting via discounted cash flows.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
HY, INSW, MYRG, ALJJ, and ENR can be thought of as valuation peers to GE, in the sense that they are in the Industrials sector and have a similar price forecast based on DCF valuation.