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GE Aerospace (GE)
NYSE:GE
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GE Aerospace
(NYSE:GE)
70Outperform
Positive Factors
Financial Performance
GE reported Q4 results beating expectations, and provided a favorable outlook for 2025, with shares closing 9% higher on the day.
New Contracts
ANA selected GEnx engines for 18 787s and LEAP-1A for 13 A321s, indicating strong demand for GE's products in new aircraft orders.
Product Certification
GE's Catalyst turboprop engine received FAA certification, reducing fuel burn by up to 20% with 10% more power.
Negative Factors
Aftermarket Services
Aftermarket demand remains higher than GE could handle, as spare parts availability continues to constrain growth.
Global Air Traffic
A downturn in global air traffic due to macroeconomic weakness could negatively impact demand for aftermarket services.
Operational Costs
The increase in SG&A expenses indicates higher operational costs, which could affect profitability.
GE Aerospace (GE) vs. S&P 500 (SPY)
Market Cap
$201.38B
Dividend Yield0.79%
Average Volume (3M)5.18M
Price to Earnings (P/E)31.4
Beta (1Y)1.27
Revenue Growth-32.60%
EPS Growth-28.55%
CountryUS
Employees53,000
SectorIndustrials
Sector Strength68
IndustryAerospace & Defense
Share Statistics
EPS (TTM)5.97
Shares Outstanding1,073,290,500
10 Day Avg. Volume5,915,734
30 Day Avg. Volume5,181,662
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.36
Price to Cash Flow (P/CF)42.20
P/FCF Ratio42.20
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$237.21Price Target Upside42.20% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering16
GE Aerospace Business Overview & Revenue Model
Company DescriptionGeneral Electric Company, doing business as GE Aerospace, designs and produces commercial and defense aircraft engines, integrated engine components, electric power, and mechanical aircraft systems. It also offers aftermarket services to support its products. The company operates in the United States, Europe, China, Asia, the Americas, the Middle East, and Africa. General Electric Company was incorporated in 1892 and is based in Evendale, Ohio.
How the Company Makes MoneyGE Aerospace generates revenue primarily through the sale of jet engines and related systems to commercial airlines, military organizations, and aircraft manufacturers. The company also earns substantial income from long-term service agreements, providing maintenance, repair, and overhaul (MRO) services to ensure optimal performance and longevity of its engines and systems. Additionally, GE Aerospace capitalizes on digital solutions, offering analytics and software that enhance aircraft performance and operational efficiency. Strategic partnerships with key aviation industry players and ongoing investments in research and development further bolster its revenue streams, positioning the company as a leader in the aerospace sector.
GE Aerospace Financial Statement Overview
Summary
GE Aerospace shows a mixed performance with strong gross profit margins and improving EBIT and EBITDA margins. However, declining revenue and cash flow challenges, coupled with declining equity, raise concerns about financial flexibility and sustainability.Income Statement
GE Aerospace shows a mixed performance in its income statement. The gross profit margin is strong, indicating efficient cost management. However, the net profit margin has been volatile, with a recent improvement. Revenue growth rate is negative due to a decline in the latest year but has shown signs of potential recovery. The EBIT and EBITDA margins are improving, which signals operational efficiency. Overall, despite recent challenges, the company is moving towards better profitability.72
Positive
Balance Sheet
The balance sheet reflects a stable financial position with a manageable debt-to-equity ratio. Stockholders' equity is positive, though it has decreased over the years, indicating potential risk in maintaining financial flexibility. The equity ratio shows a reasonable level of assets funded by equity. While there is a decrease in total assets and equity, the reduction in debt levels is a positive sign, contributing to financial stability.68
Positive
Cash Flow
Cash flow analysis shows some concerns. Free cash flow is volatile, and the growth rate is negative, reflecting challenges in generating sufficient cash. The operating cash flow to net income ratio is indeterminate due to zero operating cash flow in the latest period, highlighting potential cash generation issues. Free cash flow to net income ratio cannot be assessed due to missing data, adding uncertainty to cash flow sustainability.55
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 38.70B | 67.95B | 58.10B | 56.47B | 75.83B | Gross Profit |
| 14.39B | 17.56B | 13.83B | 13.09B | 17.96B | EBIT |
| 6.66B | 3.57B | 276.00M | 1.06B | 409.00M | EBITDA |
| 9.79B | 13.38B | 3.54B | 3.38B | 2.83B | Net Income Common Stockholders |
| 6.56B | 9.48B | 339.00M | -6.34B | 5.70B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 14.60B | 22.67B | 23.42B | 28.07B | 43.95B | Total Assets |
| 123.14B | 163.04B | 188.85B | 198.87B | 253.45B | Total Debt |
| 2.04B | 22.94B | 26.15B | 35.19B | 75.07B | Net Debt |
| -11.58B | 5.97B | 10.34B | 19.41B | 38.44B | Total Liabilities |
| 103.58B | 134.47B | 153.94B | 157.26B | 216.38B | Stockholders Equity |
| 19.34B | 27.38B | 33.70B | 40.31B | 35.55B |
| Cash Flow | Free Cash Flow | |||
| 3.68B | 3.58B | 4.74B | 1.97B | 194.00M | Operating Cash Flow |
| 4.71B | 5.18B | 5.92B | 3.33B | 3.60B | Investing Cash Flow |
| -1.67B | 3.98B | 2.27B | 21.31B | 16.64B | Financing Cash Flow |
| -6.73B | -8.61B | -5.58B | -45.18B | -19.85B |
GE Aerospace Technical Analysis
Negative
166.81
Price Trends
201.08
Negative
188.14
Negative
180.01
Negative
Market Momentum
1.49
Positive
52.77
Neutral
26.19
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GE, the sentiment is Negative. The current price of 166.81 is below the 20-day moving average (MA) of 198.92, below the 50-day MA of 201.08, and below the 200-day MA of 180.01, indicating a bearish trend. The MACD of 1.49 indicates Positive momentum. The RSI at 52.77 is Neutral, neither overbought nor oversold. The STOCH value of 26.19 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $74.57B | 18.18 | 27.75% | 1.60% | 4.44% | 110.33% | |
77 Outperform | $173.87B | 36.65 | 7.96% | 1.93% | 17.15% | 58.66% | |
75 Outperform | $72.36B | 19.78 | 17.44% | 2.11% | 12.88% | 13.78% | |
74 Outperform | $107.05B | 20.39 | 81.04% | 2.84% | 5.14% | -19.14% | |
70 Outperform | $201.38B | 31.40 | 27.62% | 0.79% | -32.60% | -28.55% | |
62 Neutral | $8.08B | 13.63 | 3.82% | 3.13% | 3.58% | -14.35% | |
39 Underperform | $113.55B | ― | -162.23% | ― | -14.49% | -399.90% |
* Industrials Sector Average
Performance Comparison
GE
GE Aerospace
166.81
11.61
7.48%
BA
Boeing
136.59
-44.97
-24.77%
GD
General Dynamics
250.01
-37.31
-12.99%
LMT
Lockheed Martin
432.15
-8.67
-1.97%
NOC
Northrop Grumman
485.52
36.88
8.22%
RTX
RTX
117.45
17.76
17.82%
GE Aerospace Earnings Call Summary
Earnings Call Date: Jan 23, 2025 | % Change Since: -11.28% | Next Earnings Date: Apr 22, 2025
Earnings Call Sentiment Positive
The earnings call highlighted GE Aerospace's strong financial performance in 2024, marked by significant revenue, profit, and cash flow growth. Despite supply chain challenges impacting some areas, the company showed resilience and adaptability. The positive outlook for 2025, with expected growth across key metrics, underscores confidence in overcoming current challenges. The overall sentiment conveyed optimism due to robust demand and strategic initiatives.Highlights
Record Orders and Revenue Growth
In Q4 2024, orders increased by 46% and revenue grew by 16% with double-digit growth in services and equipment. For the full year, revenue was up 10% and profit increased by 30% to $7.3 billion.
Strong Free Cash Flow
Free cash flow increased by 21% in Q4 and by nearly 30% for the year, reaching $6.1 billion with conversion over 120%.
Impressive Growth in Commercial Engines & Services
Q4 orders were up 50%, revenue increased by 19%, and profit rose by 44%. For the full year, profit grew by 25% to $7.1 billion.
Defense and Propulsion Technologies Growth
For Q4 2024, orders were up 22%, and defense units nearly doubled sequentially. Full-year revenue rose by 6% and profit increased by 17% to $1.1 billion.
Positive Outlook for 2025
GE Aerospace expects low double-digit revenue growth, profit in the range of $7.8 billion to $8.2 billion, EPS growth of 15% at the midpoint, and free cash flow of $6.3 billion to $6.8 billion for 2025.
Lowlights
Supply Chain Constraints Impact Deliveries
Supply chain issues led to lower internal shop visit volume and flat commercial engine output with LEAP deliveries down 5% in Q4 2024.
Challenges in Meeting Demand
Despite strong demand, material constraints and supplier issues affected the ability to meet full potential, requiring ongoing efforts to improve supply chain efficiency.
Company Guidance
During the GE Aerospace Q4 2024 earnings call, executives provided robust guidance for 2025, emphasizing anticipated continued growth across various financial metrics. They forecast low double-digit revenue growth, driven by mid-teens growth in the Commercial Engines & Services (CES) segment, with CES profit expected to increase by $700 million at the midpoint. The company aims for total profit between $7.8 billion and $8.2 billion, translating to EPS between $5.10 and $5.45, reflecting a 15% rise at the midpoint. Free cash flow is projected to reach $6.3 billion to $6.8 billion, maintaining a conversion rate above 100%. GE Aerospace plans to increase its share repurchases to $7 billion and raise its dividend by 30%, pending board approval, underscoring strong shareholder returns. The company highlighted the strategic use of their FLIGHT DECK operating model to enhance operational efficiency and address supply chain constraints, supporting both new engine deliveries and aftermarket services.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.