GE Stock: Here’s Why It Will Skyrocket in 2018

Posted On January 9, 2018 3:00 pm

2017 was disastrous for General Electric Company (NYSE:GE). GE stock is down about 32% over the last 6 months. The problems that started in the era of GE CEO Jeff Immelt finally resulted in a massive dividend and loss of shareholder value in general. However, things could turn around in 2018. General Electric is swiftly selling its unprofitable business units. The company is focusing on major and profitable business units like technology, power, aviation and healthcare. With a brand value of $38 billion, General Electric is one of the biggest companies in the world.

GE is revitalizing its energy business. The company recently acquired coal-based turbines maker, Alstom, for $9.5 billion and oil exploration company Baker Hughes’ technical services business. This has given GE a huge exposure to fossil fuel energy industry. Analysts think that the fossil fuel energy industry has a bright future amid the Trump administration’s push into the traditional energy methods. Energy Secretary Rick Perry recently developed a plan to subsidize coal, The New York Times reported in October. General Electric is also expanding its operations in the wind energy sector. In the fourth quarter of 2016, GE’s wind energy unit received about $3 billion worth of orders.

The company’s aviation business is another strength. GE has made over 33 thousand engines in the commercial aviation space.  In 2016, General Electric raked in about $8 billion from the aviation products segment. Revenues from commercial aviation services came out to $11.4 billion. Analysts think that GE’s aviation business will continue to grow amid an increasing trend of travel and tourism worldwide.

 Related: Here’s Why Intel’s Security Report is a Buying Opportunity.

GE stock will also gain value in 2018 amid President Trump’s infrastructure plan. Analysts had lost hope on this plan, but President Trump recently said that he will keep his promise of rebuilding America’s infrastructure. General Electric will also be one of the biggest beneficiaries of President Trump’s tax reform plan.

A few months ago, Goldman Sachs said in a report that General Electric will reap huge benefits from the tax reform plan as the company has billions stashed overseas due to the strict tax rules of the US. According to an estimate by Business Insider, General Electric has over $35 billion cash outside the US. New tax plan will help the company bring cash in the US without spending huge amounts on taxes.

One of the biggest growth catalysts for GE stock is Internet of Things. GE is becoming a market leader in the Industrial Internet of Things (IIoT). Apple recently closed a deal with GE to use its IIoT platform. Exelon has also decided to use GE’s sensors and applications at its facilities.

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