Why General Electric Stock Soared More Than 25% in October
Shares in industrial conglomerate General Electric (NYSE: GE) soared a whopping 25.7% in October, according to data provided by S&P Global Market Intelligence. The move was partly due to a strong month for the markets. Still, GE's 25.7% gain is significantly ahead of the S&P 500's 8% hike and reflects how much the stock was heavily oversold previously.
GE is having a challenging year. Its healthcare business has suffered revenue shortfalls due to ongoing supply chain dfficulties (management now expects $2.6 billion in GE Healthcare profit compared to initial expectations for $3.1 billion to $3.3 billion). GE Renewable Energy is set to lose $2 billion this year as the wind power industry continues to suffer supply chain challenges, declining demand (due to political uncertainty), and ultra-competitive pricing.
That said, the other two industrial businesses are in fine shape. GE Power is still on track for $1 billion to $1.2 billion in profits. And GE's most significant business, GE Aerospace, is likely to report full-year results well ahead of previous guidance – management is now guiding toward a high-teens full-year profit margin for GE Aerospace compared to previous guidance for a mid-teens profit margin (with the same revenue guidance of 20% plus growth). By way of context, Raytheon Technologies also reported excellent results in its commercial aerospace-focused businesses.
Source Fool.com
