It doesn’t take an investing whiz to come to the assumption that in all likelihood, General Electric (GE) is being grossly overvalued by the market given its current financial state and what could happen with profits this year.

GE shares presently trade on a price-to-earnings multiple of 16.6 times the high-end of management’s $0.50 to $0.60 a share profit estimate revealed on Thursday. The multiple climbs to 20 times when applying it to GE’s low estimate for earnings this year of $0.50 a share.

In both instances, GE shares are valued at a premium relative to the S&P 500’s forward price-to-earnings multiple of 16.3 times. That’s right folks — the struggling industrial giant is being valued as a borderline growth company that is fundamentally healthier than S&P 500 components.

“Can GE stabilize its operations, sure. But is the company a growth company, come on,” long-time GE analyst John Inch now at Gordon Haskett told Yahoo Finance when chatting about GE’s valuation.

Why there is a valuation disparity

GE’s rich valuation is a byproduct of investors starting to buy into new CEO Larry Culp’s turnaround plan. Shares of GE have skyrocketed some 37% in 2019 — in effect, the market is positioning ahead of a potential GE earnings recovery later this year and into 2020. That has the effect of blowing up GE’s price-to-earnings multiple today even as earnings currently are depressed.

What GE put forth in an extensive 38-page presentation Thursday only fed the excitement of investors.

Here are some things that stood out to Yahoo Finance:

• About $400 million to $500 million in HQ cost cuts in 2019.

• GE used an optimistic brush to paint its 2020 outlook by business segment. Free cash flow is seen improving in most businesses year-over-year.

• Industrial free cash flow is down $2 billion to flat in 2019, in “positive territory” in 2020 and “accelerating” in 2021.

• GE is looking for additional ways to reduce debt, such as tender offers for outstanding debt.

• GE Chief Financial Officer Jamie Miller told Yahoo Finance she is “comfortable” that most of the risks at GE Capital have been identified.

GE CEO Culp is realistic

Culp continues to pull no punches in his comments on turning the company around, saying that 2019 will be a “reset year” and that GE’s challenges are “complex.” Miller said Culp is looking at GE through a “reality-based lens,” counter to many other top executives at the company over the years.

Investors appear to have forgotten those realities on GE, and they are plentiful. For example, GE sees first quarter earnings down “significantly” as it works through issues at its power and GE Capital businesses. Inch also noted GE is subject to numerous lawsuits whose financial outcomes are unknown.