Just like in September and many months before that, so far in October, General Electric (NYSE:GE) has been stuck in neutral. Bouncing between $100 and $105 per share, investors are still unwilling to send GE stock to higher prices.

To some degree, this makes sense. CEO Larry Culp has made progress with his turnaround. But something else needs to happen that is largely outside of Culp’s control: a full recovery for GE’s aviation unit.

Until airlines get themselves “back to normal,” don’t expect the same for this flagship unit. Having said that, investors right now may be being a bit too pessimistic.

It may not happen tomorrow, next week or even next month. It may be well before it’s fully “back to normal” for aviation that General Electric shares make their way to higher prices.

But over the next year, slow-and-steady improvements (with aviation, the turnaround overall and Culp’s efforts to make it a lean enterprise) could result in slow-and-steady gains. Investors buying it today could see their patience rewarded.

GE Stock and Further Progress With Its Turnaround

As I stated back in August, it’s still too early to say Larry Culp has successfully fixed all that ails General Electric. But considering his cost-cutting and divestiture moves, it’s hard to deny that he’s moved things in the right direction.

For example, cost cutting has likely played a role in it being able to raise its guidance for free cash flow in 2021. Outlook now calls for this figure to come in at between $3.5 billion and $5 billion.

As for the sale of non-core assets — like the sale of its light bulb business or its pending sale of its nuclear turbines unit — unloading these businesses helps the company, and by extension, GE stock, in several ways.

Selling non-core businesses has raised billions in cash, enabling the industrial giant to de-lever its balance sheet. In reference to the nuclear turbine sale, BofA analyst Andrew Obin noted this latest divestiture “would modestly accelerate GE’s progress on FCF margins, deleveraging, and strategic repositioning.”

It may be happening slowly. But Culp’s big changes at General Electric are having a positive effect, and not just for results this year or in 2022. As Wells Fargo’s Joseph O’Dea noted, in an otherwise “on the fence” take on the stock, the company could see further improvement in its free cash flow. Per the analyst, free cash flow in 2023 could come in at around $7 billion. That’s a sharp improvement from the 2021 projections mentioned above. It’s also leaps and bounds above the $606 million in free cash flow it generated in 2020.

The Long Road ‘Back to Normal’ for Aviation

Of course, even as the situation gets better for GE stock, it’s still dealing with Covid-19’s enormous effect on the aviation industry. Based on checkpoint travel numbers from the TSA (Transportation Security Administration), which show traveler throughput is back to 70%-80% of pre-Covid-19 levels, you would think the industry is most of the way back to normal.

But this hasn’t meant improved results for General Electric’s aviation unit. Why? Airlines are still looking to keep their capital spending low. This is due to uncertainty that remains about the pandemic. Variants like delta make it unclear when the health crisis will finally end.

It’s also a product of the airline industry’s need to cut down debt. Riding out the pandemic came at the cost of greater amounts of debt on their balance sheets. Until both issues are resolved, capital spending likely won’t get back to 2019 levels.

Again, with this factor, it makes sense why there’s a lot of hesitancy when it comes to buying into the “GE comeback” thesis. A full recovery for aviation is years in the making. Even so, that doesn’t mean the stock stays stuck at around $100 per share for several more years. The more likely outcome is that gradual improvements across all its business units (aviation, healthcare, power), plus more asset sales, will give Wall Street reason to put more points into shares.

The Verdict on GE Stock

A stunning rally likely isn’t in the cards for General Electric unless we see Covid-19 clear up sooner than expected. But a slow-and-steady recovery isn’t the worst thing in the world. This could pave the way for slow-and-steady gains in its stock price.

Coming in with an “A” in Portfolio Grader, GE stock is a stronger opportunity than the market overall gives it credit. Consider it a buy today, before the crowd changes its lukewarm view of it.

On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.

The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

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