General Electric Company Earnings Preview

General Electric Company (NYSE:GE) stock rallied on Tuesday, ending the selloff that’s been going on since earlier this month. Monday’s declines followed a downgrade from Bank of America Merrill Lynch, and Tuesday’s rally comes despite additional bearish comments from an Oppenheimer chart technician. The next General Electric earnings report is slated for release on Wednesday before opening bell, so analysts are lining up their comments.

General Electric Company Earnings Preview
By General Electric Company (w:File:General_Electric_logo.svg) [Public domain], via Wikimedia Commons

General Electric earnings: what to expect

GE earnings are expected to come in at 29 cents per share on an adjusted basis, a decline from the 46 cents per share the company reported a year ago. Wall Street is expecting the company’s revenue to come in at $33.87 billion, an increase from the $33.09 billion it reported in the same quarter a year ago.

Consensus for aviation revenues stands at $7.16 billion, while analysts are looking for $5.25 billion in healthcare revenue. The Street estimates $2.84 billion in renewable energy revenue and $1 billion in transportation revenue.

GE stock rallies despite bearish commentary

Bank of America Merrill Lynch analyst Andrew Obin downgraded GE stock from Buy to Neutral in a note to investors on Monday. He also trimmed his price objective from $22 to $17 per share, saying that earnings revisions seem to be the key driver of GE stock. He upgraded the stock after the company’s weak third-quarter results because he thought the new management team “would be able to establish firm guidance that it could beat into ’18.”

Contrary to this view, however, GE management cut their guidance at the Nov. 13 meeting and then again on Jan. 16. Obin warned that he expects management to cut their outlook again on the GE earnings call on Wednesday.

Obin isn’t the only analyst offering bearish comments on GE stock right now. Oppenheimer chart technician Ari Wald told CNBC this week that the GE stock chart is showing a “classic falling knife” right now, so he and his team “recommend staying away.” His firm has rated GE stock a Sell for almost a year, and since then, the stock has almost been cut in half.