The company is definitely making waves. Its shares have gained 1.8%, to $19.27, as of 1:13 p.m. today, putting the stock up 10.4% so far this year. That makes it the second-best performer in the Dow Jones Industrial Average, bested only by Boeing (BA), which has jumped 10.7% in 2018. Both have outperformed the Industrial Select Sector SPDR exchange-traded fund (XLI), which has gained 6.3%, to $79.26, this year.
But are analysts rushing out to upgrade GE? Nope. Far from it. Of the seven analysts who have released notes on the industrial giant this year have left their ratings unchanged, including JPMorgan’s Stephen Tusa, who reiterated his Underweight rating on Monday. Oppenheimer’s Christopher Glynn and Patrick Schuchard, too, stuck with their Underperform rating in a note released today, despite offering plenty of reasons why GE could outperform, such as a better oil and gas climate and divestitures offsetting a tax hit from GE’s insurance business. They cite “near-term headlines” that “could include (we speculate) a higher tax rate from reform, and potential for further upsizing of pending legacy insurance reserve funding requirement.” The upshot: “We are deferring upgrading shares to Perform,” Glynn and Schuchard write.
Which is probably wise. Chasing a stock is rarely the right strategy, and with General Electric set to release earnings on Jan. 24, investors could well have another chance to go long if they so choose.