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GE had a golden cross, the first since the death cross 2 years ago. The company still has lots of challenges (heavy debt), but the chart is starting to look promising for a rebound -


>>> 'A New Energy' Is Seen In GE As Aviation Unit Leads Transformation; GE Stock Up


Investor's Business Daily

6-19-19


https://www.investors.com/news/ge-stock-rises-potential-buy-point-ge-aviation-leads-growth/?src=A00220&yptr=yahoo


General Electric's (GE) core aviation unit is leading GE's transformation on the back of its stability and underlying growth, Citigroup said. GE stock rose.

Analysts at Citigroup acknowledged "teething issues" on the new GE9x jet engine, but said they "sense a new energy in Aviation and across GE" after meetings with management and a GE Aviation investor presentation.

"The business does seem to be operating on all cylinders," Citi analyst Andrew Kaplowitz said, citing military growth, Leap engine purchases, and aftermarket service-related growth. He also backed his buy rating and 14 target price for GE stock.

Meanwhile, GE Aviation has booked more than $52 billion in orders so far this week at the Paris Air Show. That includes $20-billion-plus orders apiece from India's Indigo airlines and Malaysia's AirAsia, as well as aircraft leasing deal with Amazon Air as Amazon (AMZN) builds out its delivery and transport network. In 2017, GE booked roughly $31 billion at the same show.

The Citigroup note highlighted more disclosure and improvement in an area closely watched by investors — cash generation. GE Aviation's $4.2 billion in free cash flow in 2018 represented 88% conversion, Kaplowitz said.

He added: "There will be expected (Boeing) Max drag in 2019 (close to $300 million in Q2 and we lower our overall GE free cash estimate for Q2 to -$1.6 billion from -$800 million to be more in-line with guidance of -$1 billion to -$2 billion), but we sense management confidence in improved cash performance moving forward (flattish Aviation working capital expected for the year) led by a strong aftermarket environment, favorable terms on new orders, and focus on 'daily' cash collection vs. an end of quarter bias."

Two Boeing (BA) Max jets were involved in fatal crashes in the past year, leading to groundings as well as a halt to deliveries and slowdown in production.

Shares of General Electric rose 0.2% to 10.44 on the stock market today, rising further above the 50-day and 200-day moving averages. While GE stock is forming a base with a potential 11.85 buy point, the entry is well below prior highs.

Fellow Boeing jet engine supplier United Technologies (UTX) was flat, while the Dow Jones Industrial Average advanced 0.2%. United Tech and Boeing are Dow Jones stocks.

The relative strength line for GE stock has been on an uptrend year to date. The RS line, shown in blue below, tracks performance against the S&P 500.

'Hard To Poke Holes' In GE Aviation

GE Aviation is testing and redesigning a compressor part in the colossal new GE9x jet engine that has delayed the maiden flight of the Boeing 777x, the world's largest twin-engine jetliner.

Citigroup's Kaplowitz noted that, but found it's "hard to poke holes" in the aviation unit's strong commercial portfolio.

The International Air Transport Association's "2019 current forecast growth of 5% is still strong and GE's visibility toward continued aftermarket-led growth is impressive," he said.

He called the Indigo deal a "large win" for GE's Leap-1A, since the airline previously used United Tech's Pratt & Whitney engines.

Simultaneously, GE Aviation's revenue from military orders is growing, Citigroup said.

Meanwhile the GE9x debuted at the 2019 Paris Air Show this week, and has received more than 700 orders. The Leap engine has reached a record 17,000-plus orders, with GE on pace to deliver more than 1,800 Leap engines this year.

General Electric is focused on its "crown jewel" aviation segment even as CEO Larry Culp accelerates efforts to return its power segment to profitability.

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