What happened
A Wall Street analyst believes General Electric (NYSE: GE) shares are set up well going into earnings season and has raised her price target as a result. Shares of GE are getting a lift from the news, trading up as much as 5% on Thursday.
So what
General Electric has been mired in a long slump, with shares down more than 60% over the past five years and down 28% in 2022 alone. The company has shown progress in 2022 with trying to streamline its business and pay down debt, but it's still in the early stages of a turnaround.
Deutsche Bank analyst Nicole DeBlase is feeling upbeat about GE heading into earnings season. The analyst raised her price target on the shares to $92, from $88, and kept a buy rating on the shares.
DeBlase said in a note that the setup this quarter for multi-industrials like GE feels "nearly identical to the last." Last quarter, General Electric did very well, beating profit expectations and delivering positive cash flow.
GE is expected to release third-quarter results on Oct. 25.
Now what
The picture isn't entirely rosy. DeBlase noted that a pullback in consumer spending and residential construction is still evident, and she said she is in a "holding pattern, waiting for negative commentary and downward" earnings expectations. The strong dollar could also play into results for companies including GE that do substantial business overseas, and inflation could slow global economies in the months to come.
But investors watching GE know that this company is a long-term rehab project, and after a couple of years of seemingly constant negative surprises, slow and steady is a major step in the right direction. On a day when Wall Street is rallying and investors are feeling bullish, General Electric shares are outperforming the broader markets.
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Lou Whiteman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
