* Note: Prices are in Million (M) USD.
Description:
General Electric Company (GE) is an American multinational conglomerate incorporated in New York City and headquartered in Boston. As of 2018, the company operates through the following segments: aviation, healthcare, power, renewable energy, digital industry, additive manufacturing and venture capital and finance.
These criteria used Company's Cash, EBITDA and Debt balance to determines its fair value:
Cash : $13,619 M
Debt : $19,273 M
EBITDA : $10,380 M
Net Debt (Debt - Cash): $5,654 M
Since Net Debt is covered by EBITDA within 1 year, 3 points assigned.
This criteria used industry in which company operates:
Sector: Industrials
Industry: Diversified industrials
Based on industry, 3 points assigned.
This criteria used Company's Price To Earning (P/E) Ratio to determines its fair value:
Forward PE Ratio: 42.83
Since Forward PE Ratio is greater than 35, 0 point assigned.
This criteria used Company's ability to convert Sales into free cash flow to determine fair value:
Using last 20 overlapping fiscal years (max 20).Average Free Cash Flow: $11,343 M
Average Revenue: $113,926 M
Revenue Converted To Free Cash Flow (%): 10.0%
Since Free Cash Flow (FCF) to Revenue percentage is less than 15, 1 point assigned.
This criteria used company's growth potential to calculate its fair value:
Latest Revenue (2024-12-31): $38,702 M
Revenue 4 Years Ago (2020-12-31): $75,834 M
Last 5 Years Average Revenue Growth: -10%
Since Revenue Growth is between 0 - 5, 1 point assigned.
This criteria used Company's ability to buy back its own share:
Latest Share Count (2024-12-31): $1,094 M
Share Count 5 Years Ago (2020-12-31): $1,095 M
Company is buying back its own shares, 3 points assigned.
This criteria used Company's dividend payout ratio to determine its fair value:
Next Year Earnings Per Share (EPS): $7.05
Trailing 12-Month Earnings Per Share (EPS): $5.80
Average Earnings Per Share (EPS): $6.43
Dividend Per Share (DPS): $1
Payout Ratio: 20%
Dividend Yield: 0%
Since company Payout Ratio is less than 50, 2 points assigned.
Since Dividend Yield is less than 1, 0 point assigned.
This criteria used Company's Return On Equity (ROE%) to determine its fair value:
Using last 20 valid ROE years (max 20).Average ROE: 5.2%
Since Average ROE is less than 10, 1 point assigned.
This criteria used Company's current price to its 52 week low price to determines its fair value:
Current Price: $275
52-Week Low: $149
Threshold Price (15% Above 52-Week Low): $172
Since Current price is not within 15% threshold, 0 point assigned.
This criteria used Company's Market Cap to determines its fair value:
Market Capitalization: $285,661 M
Since Market Cap is between 100B - 500B, 3 points assigned.
% Exposure to Total Portfolio
Based on the market cap, we recommend do not exceed 4% exposure of Total Portfolio.
Value-Trade has assigned 17 points to above GE Aerospace (GE) stock.
Heads up: One or more P/E inputs look exaggerated and may skew the blend.
• Last 5 Years Avg PE
37.73 (>2× median)
Further research is recommended; please use your own due diligence.In such cases, multiplying earnings by the long-run average P/E typically gives a closer, more reliable fair value.
Rule of thumb: Last 5 Years Avg P/E (37.73)
× EPS ($6.43) = $242.42.
Last 5 Years Avg PE 37.73, Fair Value PE 12, Industry Based PE 18, RCFC Based PE 17.97, ROE Based PE 14.16, Risk-Free Anchored PE (25% MoS) 17.08. Based on these 6 values, average assigned is 19.49. Value-Trades has assined P/E value 19.49. Since an average (Current Year EPS + Next Year EPS) earning per share is $6.425.
The fair value of GE Aerospace (GE) stock should be (19.49 x $6.425) = $125.23.
