GE Aerospace (GE) AI Stock Analysis

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GE Aerospace

(NYSE:GE)

Rating:71Outperform

Price Target:―

GE Aerospace shows strong financial performance with high profitability and stable leverage. The earnings call highlights significant growth and strategic investments, though challenges like tariffs and supply chain issues persist. Technical analysis indicates positive momentum, but valuation metrics suggest the stock may be overvalued.

Positive Factors

Financial Performance

The company's CES Services segment reported impressive profit margins and growth, reinforcing confidence in its financial performance.

Production and Expansion

GE9X engines are currently rolling off the production line in anticipation of 777X EIS, with shipments for testing and then to Boeing.

Strategic Initiatives

GE's strategic measures such as cost controls and price surcharges effectively neutralized the impact of tariffs, showcasing its ability to manage external pressures.

Negative Factors

Export/Import Restrictions

Potential further export/import restrictions on aero could pose a headwind to GE's commercial business.

Military Contracts

US Army is no longer planning to procure GE's T901 through Improved Turbine Engine Program to re-engine Apaches and Black Hawks.

Travel Demand

Potential risks to travel demand could pose a headwind to GE's commercial business if the macro environment continues to dampen travel demand.

GE Aerospace (GE) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$257.83B

Dividend Yield0.64%

Average Volume (3M)5.37M

Price to Earnings (P/E)37.7

Beta (1Y)1.29

Revenue Growth-42.92%

EPS Growth109.75%

CountryUS

Employees53,000

SectorIndustrials

Sector Strength92

IndustryAerospace & Defense

Share Statistics

EPS (TTM)1.49

Shares Outstanding1,066,386,600

10 Day Avg. Volume5,410,079

30 Day Avg. Volume5,370,541

Financial Highlights & Ratios

PEG Ratio4.13

Price to Book (P/B)11.03

Price to Sales (P/S)0.00

P/FCF Ratio48.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$228.78

Price Target Upside-5.38% Downside

Rating ConsensusStrong Buy

Number of Analyst Covering12

GE Aerospace Business Overview & Revenue Model

Company DescriptionGE Aerospace, a subsidiary of General Electric, is a leading provider of jet engines, components, and integrated systems for commercial, military, and business aviation sectors. The company is renowned for its cutting-edge technology and innovation in engine design and manufacturing, offering a wide range of products and services that ensure optimal performance and efficiency for various types of aircraft.

How the Company Makes MoneyGE Aerospace generates revenue primarily through the sale of jet engines and related systems to aircraft manufacturers and airlines worldwide. Additionally, the company provides comprehensive maintenance, repair, and overhaul (MRO) services, which form a significant part of its revenue stream. Long-term service agreements with airlines and military contracts also contribute substantially to its earnings. Strategic partnerships and joint ventures with other aerospace firms enhance its technology offerings and market reach, further bolstering its financial performance.

GE Aerospace Key Performance Indicators (KPIs)

Any

Services Orders

Services Orders
Tracks the demand for service contracts, reflecting customer reliance on the company’s maintenance and support offerings, which can drive recurring revenue.

Chart InsightsGE Aerospace's Commercial Engines and Services segment is experiencing robust growth, with a notable 31% increase in orders, reflecting strong demand. Despite a slight dip in Q1 2025, the segment's overall trajectory remains positive, supported by strategic investments in U.S. manufacturing and R&D. Meanwhile, Defense and Propulsion Technologies show consistent performance, with a 5% growth in defense units. However, supply chain challenges and tariffs pose risks, potentially impacting revenue conversion and costs. The company's commitment to innovation and backlog execution positions it well for sustained growth.

Data provided by:

Main Street Data

GE Aerospace Earnings Call Summary

Earnings Call Date:Apr 22, 2025

(Q1-2025)

% Change Since: 35.56%|

Next Earnings Date:Jul 22, 2025

Earnings Call Sentiment Positive

GE Aerospace reported a strong start to the fiscal year with significant growth in orders, revenue, and profit. The company is investing heavily in U.S. manufacturing and R&D, and it has a robust backlog. However, challenges remain due to tariffs, supply chain issues, and uncertainties in departure growth. Despite these challenges, the company's strong performance and strategic investments position it well for the future.

Q1-2025 Updates

Positive Updates

Strong Start to Fiscal Year 2025

GE Aerospace delivered strong first-quarter results with orders up 12% and revenue growing 11%. Profit increased by 38% to $2.1 billion, leading to margins of 23.8%.

Commercial Engines & Services Growth

Services strength continued with orders up 31% and revenue up 17%, driving total operating profit growth of 35% year-over-year.

Defense & Propulsion Technologies Performance

Defense units grew 5% and profit increased by 16%, showing solid performance in the Defense & Propulsion Technologies segment.

Increased Investment in U.S. Manufacturing

GE Aerospace is investing $1 billion in U.S. manufacturing this year and hiring over 5,000 U.S. workers.

Robust Backlog and R&D Investment

The company is executing a $170 billion-plus backlog and investing approximately $3 billion in annual R&D spending.

Negative Updates

Impact of Tariffs

Heightened tariffs are expected to result in additional costs of roughly $500 million despite strategies to optimize operations.

Supply Chain Challenges

There is a lag in converting orders to revenue due to broader supply chain dynamics, with spare parts delinquency increasing over 2x year-over-year.

Uncertainty in Departure Growth

The company is taking a cautious approach with a slower second half in their estimate, resulting in anticipated low single-digit departure growth for the full year.

Company Guidance

In the first quarter of fiscal year 2025, GE Aerospace reported significant growth, with orders increasing by 12% and revenue rising by 11%, both driven by double-digit growth in Services and Equipment segments. The company achieved a 38% increase in profit, amounting to $2.1 billion, resulting in a profit margin of 23.8%. Earnings per share (EPS) rose by 60% year-over-year to $1.49, while free cash flow reached $1.4 billion. In the Commercial Engines & Services (CES) division, orders and revenue grew by 31% and 17%, respectively, contributing to a 35% year-over-year increase in operating profit. Defense & Propulsion Technologies (DPT) also performed well, with defense units growing by 5% and profit rising by 16%. GE Aerospace maintained its guidance for the full year, expecting low double-digit revenue growth, profit between $7.8 billion and $8.2 billion, EPS of $5.10 to $5.45, and free cash flow in the range of $6.3 billion to $6.8 billion. The company also continued its commitment to research and development, investing approximately $3 billion annually, while addressing supply chain challenges and advocating for a zero-tariff regime in the aviation sector.

GE Aerospace Financial Statement Overview

Summary

GE Aerospace demonstrates strong profitability with a robust net profit margin and effective cost management. The balance sheet is stable with low leverage and effective equity usage. However, negative free cash flow growth flags potential challenges in cash generation, requiring attention to cash management strategies.

Income Statement

Positive

GE Aerospace shows a strong Gross Profit Margin of 38.1% in TTM, indicating effective cost management. The Net Profit Margin is also robust at 17.6%, reflecting solid profitability. Revenue Growth Rate from 2024 to TTM is 2.5%, suggesting moderate growth, while the EBIT and EBITDA Margins of 18.9% and 22.8% respectively, highlight efficiency in operations. Overall, the income statement demonstrates stability with room for growth.

Balance Sheet

Positive

The Debt-to-Equity Ratio in TTM is low at 0.11, which indicates low financial leverage and a strong equity base. The Return on Equity is healthy at 36.3%, showcasing effective use of equity to generate profits. The Equity Ratio stands at 15.5%, which suggests a stable financial structure but leaves room for improvement in asset management. Overall, the balance sheet reflects financial stability with controlled leverage.

Cash Flow

Positive

The Free Cash Flow Growth Rate from 2024 to TTM is negative at -21.1%, which could signal potential challenges in cash generation. However, the Operating Cash Flow to Net Income Ratio of 0.53 indicates adequate cash conversion. The Free Cash Flow to Net Income Ratio is 0.41, showing reasonable cash flow relative to net income. The cash flow statement reveals some concerns in growth but maintains operational cash adequacy.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
39.68B	38.70B	67.95B	58.10B	56.47B	75.83B
	Gross Profit
15.12B	14.39B	17.56B	13.83B	13.09B	17.96B
	EBIT
7.50B	6.66B	3.57B	276.00M	1.06B	409.00M
	EBITDA
9.83B	9.79B	13.38B	3.54B	3.38B	2.83B
	Net Income Common Stockholders
7.00B	6.56B	9.48B	339.00M	-6.34B	5.70B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
13.40B	14.60B	22.67B	23.42B	28.07B	43.95B
	Total Assets
124.12B	123.14B	163.04B	188.85B	198.87B	253.45B
	Total Debt
19.57B	19.27B	22.94B	26.15B	35.19B	75.07B
	Net Debt
7.17B	5.65B	5.97B	10.34B	19.41B	38.44B
	Total Liabilities
104.66B	103.58B	134.47B	153.94B	157.26B	216.38B
	Stockholders Equity
19.25B	19.34B	27.38B	33.70B	40.31B	35.55B
Cash Flow		Free Cash Flow
4.41B	3.68B	3.58B	4.74B	1.97B	194.00M
	Operating Cash Flow
5.23B	4.71B	5.18B	5.92B	3.33B	3.60B
	Investing Cash Flow
-2.79B	-1.67B	3.98B	2.27B	21.31B	16.64B
	Financing Cash Flow
-8.81B	-6.73B	-8.61B	-5.58B	-45.18B	-19.85B

GE Aerospace Technical Analysis

Technical Analysis Sentiment

Positive

Last Price241.78

Price Trends

50DMA

203.91

Positive

100DMA

198.99

Positive

200DMA

187.60

Positive

Market Momentum

MACD

10.56

Negative

RSI

78.40

Negative

STOCH

81.92

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GE, the sentiment is Positive. The current price of 241.78 is above the 20-day moving average (MA) of 220.21, above the 50-day MA of 203.91, and above the 200-day MA of 187.60, indicating a bullish trend. The MACD of 10.56 indicates Negative momentum. The RSI at 78.40 is Negative, neither overbought nor oversold. The STOCH value of 81.92 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GE.

GE Aerospace Risk Analysis

GE Aerospace disclosed 18 risk factors in its most recent earnings report. GE Aerospace reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

GE Aerospace Peers Comparison

Overall Rating

UnderperformOutperform

Sector (65)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
GD	78 Outperform	$74.94B	19.38	18.23%	2.10%	14.11%	17.65%
LMT	77 Outperform	$111.72B	20.60	82.55%	2.75%	3.12%	-15.29%
RTX	73 Outperform	$179.27B	39.35	7.54%	1.90%	15.11%	34.14%
GE	71 Outperform	$257.83B	37.70	28.09%	0.64%	-42.92%	109.75%
NOC	70 Outperform	$67.86B	18.56	25.41%	1.75%	0.61%	77.28%
Sector *	65 Neutral	$4.41B	12.06	5.22%	249.80%	4.09%	-12.16%
BA	52 Neutral	$152.58B	―	-162.23%	―	-9.15%	-406.76%

* Industrials Sector Average

Performance Comparison

GE Aerospace

241.78

79.27

48.78%

Boeing

201.03

29.38

17.12%

General Dynamics

279.23

-8.26

-2.87%

LMT

Lockheed Martin

476.85

35.70

8.09%

NOC

Northrop Grumman

475.47

34.68

7.87%

RTX

134.19

31.77

31.02%

GE Aerospace Corporate Events

Shareholder MeetingsBusiness Operations and Strategy

GE Aerospace Shareholders Meeting Approves Key Proposals

Neutral

May 9, 2025

On May 6, 2025, GE Aerospace held its annual shareholders meeting where all company nominees for director were elected, the advisory vote on executive compensation was approved, and Deloitte & Touche LLP was ratified as the independent auditor for 2025. However, a shareholder proposal requesting a vote on severance payments was not approved. These decisions reflect the company’s strategic direction and governance priorities, impacting its operational focus and stakeholder engagement.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.