General Electric (NYSE: GE) stock price rose to the highest level in the last twelve months, thanks to the strengthening balance sheet and future fundamentals. GE shares run up more than 17% since it announced stronger than expected third-quarter results. Its market capitalization jumped back above $100 billion after four quarters.
GE shares rallied 29% in the last month and up almost 41% year to date. General Electric stock price has outperformed 69 stocks comprising the SPDR Industrial Select Sector ETF in the last month. Despite the recent rally, GE shares have further upside potential according to market analysts.
General Electric Stock Price Still Presents a Buying Opportunity
Although GE shares have already gained substantial value and the stock is trading around 52-weeks high, market pundits are seeing further upside potential. They believe it’s good to reconsider GE amid clear signs of progress along with improvement in future fundamentals.
Barclay’s analyst Julian Mitchell believes the new CEO took the right steps to lift the struggling company. The analyst claims they are seeing clear signs of progress; the long-term investors should take a closer look at GE.
The analysts are also showing confidence in the balance sheet. They expect a significant reduction in indebtedness amid the potential expansion in free cash flows and asset sales. Market pundits are anticipating its debt to decline to 4.4x EBITDA by the end of next year.
The New Business Strategy is Supporting GE Shares
The company has been working on the strategy of selling noncore assets while focusing on industrial and power businesses.
The strategy appears to be working considering the expectations for industrial free cash flow between zero and $2B. This represents a significant improvement from the previous forecast of negative $1B to a positive $1B.
However, the new CEO says it’s a transformational year; they are expecting a meaningful improvement in the next two years. On the whole, General Electric stock price fundamentals are improving at a robust pace. Therefore, analysts are suggesting to buy GE shares.