General Electric stock price has outperformed in 2023: Is it a buy?

General Electric (NYSE: GE) stock price has had a spectacular growth in 2023 as investors cheer the company’s turnaround and strong demand in its aviation business. The shares ended the first half of the year at $110, bringing the year-to-date gains to 65%. This means that the shares have outperformed the S&P 500 and Nasdaq 100 indices.

Turnaround momentum accelerating

General Electric, a giant manufacturing company, has been implementing a major turnaround. Earlier this year, the company took GE Healthcare public. Today, that company has a market cap of over $36 billion.

GE also launched GE Vernova, a company that houses its energy products. The remaining company will see the company focus on civil and defense aviation. It will primarily compete with the likes of Rolls-Royce Holdings, Safran, and Pratt & Whitney.

GE stock price has soared this year as investors reflect on the rising demand for jet engines rise. Most of these engines are narrow body aircrafts, where GE has a leading market share. Demand for these aircraft has also risen this year.

This strength was seen in the company’s first-quarter results. It orders jumped by 26% as the LEAP engine continued doing well. It doubled its operating profit and significantly reduced its debt load. Its free cash flow came in at $102 million. The management expects that its free cash flow will be between $3.6 billion and $4.2 billion.

In all, General Electric stock has more upside as the company’s turnaround continues. I believe that the movement from a conglomerate to a lean company will be a good thing. It will enable the company to simplify how the company operates. 

Still, the company will face several headwinds ahead. For one, it seems like Airbus and Boeing are facing manufacturing challenges. For example, in February, the company paused its 787 manufacturing. In April, it also warned of 737 Max delivery delays. The company said:

“We’ll face headwinds from tougher comps and the mix impact from equipment growth, inflation and investments. However, we continue to expect to deliver significant profit dollar growth and higher free cash flow in 2023.”

General Electric stock price forecast

GE chart by TradingView

The weekly chart shows that the GE share price has been in a strong bullish trend in the past few months. This stock moved above the important resistance point at $90.16, the highest point on March 15th, June 1st, and November 15th last year. 

The shares moved above the 50% Fibonacci Retracement level. Also, the shares have seen the 200-week and 50-week moving averages have formed a golden cross pattern. This pattern is one of the most bullish signs.

Therefore, the shares will likely continue rising as buyers target the next key resistance point at  $124.30, the 61.8% retracement level. A break above this level will see it rise to the key level at $150 (78.6% retracement level).