GE Aerospace (GE) AI Stock Analysis

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GE Aerospace

(NYSE:GE)

71Outperform

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

Defense Program

GE reached a critical milestone on the XA102 engine and received a $3.5bn award for the NGAP program, which could serve as a defense catalyst.

Financial Performance

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

Order Growth

The substantial CES Services backlog and strong order growth provide a solid foundation for continued revenue growth in the future.

Profit Guidance

GE has shown strong control over its business environment by reaffirming its profit guidance despite including significant tariffs and macroeconomic challenges.

Negative Factors

Global Air Traffic Downturn

A downturn in global air traffic due to macroeconomic weakness could negatively impact demand for aftermarket services.

Travel Demand Risks

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

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

Market Cap

$222.45B

Dividend Yield0.71%

Average Volume (3M)7.02M

Price to Earnings (P/E)32.6

Beta (1Y)1.31

Revenue Growth-42.92%

EPS Growth109.75%

CountryUS

Employees53,000

SectorIndustrials

Sector Strength77

IndustryAerospace & Defense

Share Statistics

EPS (TTM)1.49

Shares Outstanding1,066,386,600

10 Day Avg. Volume5,485,752

30 Day Avg. Volume7,024,037

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)0.00

Price to Cash Flow (P/CF)0.00

P/FCF Ratio0.00

Enterprise Value/Market Cap1.00

Enterprise Value/RevenueN/A

Enterprise Value/Gross Profit15.51

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$229.58

Price Target Upside9.37% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering14

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 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.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
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
19.27B	22.94B	26.15B	35.19B	75.07B
	Net Debt
5.65B	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

Technical Analysis Sentiment

Positive

Last Price209.92

Price Trends

50DMA

196.02

Positive

100DMA

191.04

Positive

200DMA

183.49

Positive

Market Momentum

MACD

4.52

Negative

RSI

65.53

Neutral

STOCH

91.46

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 209.92 is above the 20-day moving average (MA) of 194.25, above the 50-day MA of 196.02, and above the 200-day MA of 183.49, indicating a bullish trend. The MACD of 4.52 indicates Negative momentum. The RSI at 65.53 is Neutral, neither overbought nor oversold. The STOCH value of 91.46 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 (64)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
GD	78 Outperform	$72.63B	18.89	18.23%	2.13%	14.11%	17.65%
LMT	78 Outperform	$109.70B	20.37	82.55%	2.75%	3.12%	-15.29%
RTX	73 Outperform	$171.22B	37.71	7.54%	1.97%	15.11%	34.14%
GE	71 Outperform	$222.45B	32.58	28.09%	0.71%	-42.92%	109.75%
NOC	70 Outperform	$70.16B	19.42	25.41%	1.69%	0.61%	77.28%
Sector *	64 Neutral	$4.25B	11.69	5.23%	249.83%	4.04%	-9.46%
BA	52 Neutral	$140.21B	―	-162.23%	―	-9.15%	-406.76%

* Industrials Sector Average

Performance Comparison

GE Aerospace

209.92

43.53

26.16%

Boeing

191.70

10.45

5.77%

General Dynamics

269.45

-20.47

-7.06%

LMT

Lockheed Martin

474.53

18.11

3.97%

NOC

Northrop

486.04

20.62

4.43%

RTX

128.67

25.20

24.35%

GE Aerospace Earnings Call Summary

Earnings Call Date:Apr 22, 2025

(Q1-2025)

% Change Since: 17.70%|

Next Earnings Date:Jul 29, 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.

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.