As of May 27, 2025, General Electric Co's estimated intrinsic value ranges from $83.80 to $262.68 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $262.68 | +12.8% |
| Discounted Cash Flow (5Y) | $235.93 | +1.3% |
| Dividend Discount Model (Multi-Stage) | $224.29 | -3.6% |
| Dividend Discount Model (Stable) | $249.07 | +7.0% |
| Earnings Power Value | $83.80 | -64.0% |
Is General Electric Co (GE) undervalued or overvalued?
With the current market price at $232.79, the stock appears to be fairly valued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate General Electric Co's intrinsic value, including:
The cost of capital is a critical factor in valuation models, representing the required return for investors.
| WACC Component | Low | High |
|---|---|---|
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.55 | 0.73 |
| Cost of equity | 6.4% | 9.0% |
| Cost of debt | 4.2% | 4.8% |
| Tax rate | 10.3% | 11.5% |
| Debt/Equity ratio | 0.08 | 0.08 |
| After-tax WACC | 6.2% | 8.6% |
Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:
| DCF Model | Fair Value | Enterprise Value | % from Terminal Value |
|---|---|---|---|
| 5-Year Growth | $236 | $258,757M | 86.4% |
| 10-Year Growth | $263 | $287,288M | 74.0% |
| 5-Year EBITDA | $160 | $177,863M | 80.2% |
| 10-Year EBITDA | $188 | $208,018M | 64.0% |
The DDM values a company based on its expected future dividend payments. We used two approaches:
EPV assesses a company's value based on its current normalized earnings power, assuming no growth.
| EPV Component | Value |
|---|---|
| Normalized Earnings | $6,973M |
| Discount Rate (WACC) | 8.6% - 6.2% |
| Enterprise Value | $80,858M - $112,203M |
| Net Debt | $7,166M |
| Equity Value | $73,692M - $105,037M |
| Outstanding Shares | 1,066M |
| Fair Value | $69 - $98 |
| Selected Fair Value | $83.80 |
| Metric | Value |
|---|---|
| Market Capitalization | $248245M |
| Enterprise Value | $255411M |
| Trailing P/E | 35.49 |
| Forward P/E | 29.76 |
| Trailing EV/EBITDA | 14.70 |
| Current Dividend Yield | 49.31% |
| Dividend Growth Rate (5Y) | 11.68% |
| Debt-to-Equity Ratio | 0.08 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 30% | $78.80 |
| Discounted Cash Flow (5Y) | 25% | $58.98 |
| Dividend Discount Model (Multi-Stage) | 20% | $44.86 |
| Dividend Discount Model (Stable) | 15% | $37.36 |
| Earnings Power Value | 10% | $8.38 |
| Weighted Average | 100% | $228.39 |
Based on our comprehensive valuation analysis, General Electric Co's weighted average intrinsic value is $228.39, which is approximately 1.9% below the current market price of $232.79.
Key investment considerations:
Given these factors, we believe General Electric Co is currently fairly valued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.