GE Aerospace
GE
$342.75
+1.43%
GE Aerospace is the world's leading designer, manufacturer, and servicer of commercial and military aircraft turbine engines, operating through its own product lines and the CFM International joint venture with Safran, and generating the bulk of its profit from decades-long aftermarket service contracts on an installed base of roughly 80,000 engines. The company is the surviving core of the historic General Electric conglomerate, now a pure-play aerospace franchise whose competitive moat rests on engine OEM incumbency, proprietary service networks, and switching costs embedded in airframe-engine pairings. The current investor debate centers on whether record quarterly results and raised guidance can sustain a premium multiple that already discounts years of aftermarket growth, particularly after the stock's sharp third-quarter pullback and subsequent rebound. Sentiment is also being shaped by the $12 billion acquisition of Consolidated Precision Products, which vertically integrates mission-critical castings capacity but introduces integration and leverage risk, alongside persistent questions about margin trajectory as engine deliveries ramp and cost pressures build.…
GE
GE Aerospace
$342.75
Related headlines
Investment Opinion: Should I buy GE Today?
Rating: Buy, with a caveat on entry discipline. GE Aerospace is a high-quality, cash-generative aftermarket annuity trading at a premium price; the thesis is that 15.52% revenue growth, $8.018 billion of trailing free cash flow, and a 20-of-21 Buy consensus with a $378.43 average target (17.1% upside from $323.24) outweigh a 37.76x trailing PE that already discounts a lot of good news. The core reasoning is that earnings are not the risk — the tight $12.91-$14.21 FY EPS estimate cluster against $13.45 consensus shows near-term numbers are well anchored — so the debate is about multiple, and a PEG of 1.079 argues the premium is roughly earned.
Supporting evidence is broad: revenue grew 15.52% year-over-year to $14.118 billion in Q3 2026, with service revenue of $6.347 billion more than double product revenue of $2.653 billion; trailing free cash flow of $8.018 billion funded $1.979 billion of Q3 buybacks and $489 million of dividends while leaving $10.283 billion of cash; net margin is 18.98% and operating margin 19.13%; and the stock trades at 34.71x forward earnings versus 37.76x trailing, implying roughly 8% multiple compression as EPS ramps. Against aerospace norms in the high-teens to mid-20s, GE is expensive on 27.92x EV/EBITDA and 7.17x sales, but the recurring aftermarket stream and 46.6% ROE (albeit levered by a 7.26x equity multiplier) justify a quality premium that the PEG of 1.079 quantifies as fair rather than stretched.
Three risks could invalidate the thesis: gross margin has slid from 39.65% in Q1 2025 to 35.57% in Q3 2026 and operating margin from 23.3% to 16.8%, the $12 billion CPP acquisition will consume most of the cash pile against a 1.097 debt-to-equity and 1.041 current ratio, and a 1.409 beta amplifies any sector rotation. This Buy would downgrade to Hold if gross margin breaks below 34% or leverage exceeds 1.2x D/E post-CPP, and upgrade in conviction if service margins stabilize above 37% with the multiple holding under 35x forward. Verdict: fairly valued to modestly rich relative to its own history (23.69x PE at year-end 2024, 32.34x at year-end 2025), but defensible versus peers on growth-adjusted terms — a buy on weakness toward the $285-$300 shelf, not a chase above $380.
Sign up to view all
GE 12-Month Price Forecast
The forward view is constructive but valuation-dependent: the earnings base is secure given the tight $12.91-$14.21 EPS cluster and 15.52% revenue growth, so the 12-month outcome hinges on whether the 37.76x trailing multiple holds as margins stabilize. The 17.1% average target upside and 20-of-21 Buy consensus provide a supportive anchor, while the PEG of 1.079 suggests the premium is earned rather than speculative. The main swing factor is gross margin — a recovery above 37% would validate the bull case toward $431, whereas a slide below 34% would likely trigger compression toward the $280 low target. I would upgrade to high confidence on a clean CPP close with stable leverage and a Q4 gross margin rebound, and downgrade to neutral if operating margin falls below 15% or the stock breaks the $285.64 October low.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on GE Aerospace's 12-month outlook, with a consensus price target around $378.43 and implied upside of +10.4% versus the current price.
Average Target
$378.43
23 analysts
Implied Upside
+10.4%
vs. current price
Analyst Count
23
covering this stock
Price Range
$280 - $431
Analyst target range
Coverage is deep and overwhelmingly constructive: 21 analysts rate the stock, with 20 Buy, 2 Hold, and 1 Sell, yielding a consensus recommendation of "strong_buy" and a mean rating of 1.478 on a 1-to-5 scale. The average target price of $378.43 implies roughly 17.1% upside from the current $323.24, a spread wide enough to be meaningful but anchored by a bullish consensus. Recent institutional actions reinforce the positive tilt — UBS, Susquehanna, RBC, JP Morgan, Morgan Stanley, Wells Fargo, Jefferies, and Bernstein all reiterated Buy/Outperform/Overweight ratings in the July-October window, with only BNP Paribas maintaining an Underperform stance.\n\nThe target range of $280 to $431 is wide, spanning about 54% from low to high, which signals genuine disagreement about the durability of aftermarket margins and the CPP integration. The $431 high target implies multiple expansion toward the upper end of the historical PE band plus successful execution on the acquisition and continued double-digit service growth, while the $280 low sits essentially at the 52-week low and prices in margin compression, integration missteps, or an aerospace demand slowdown. Consensus FY EPS estimates of $13.45 (range $12.91-$14.21) and revenue near $72.5 billion provide the earnings base underpinning those targets; the tight clustering of EPS estimates suggests high confidence in near-term numbers, leaving multiple re-rating — not earnings — as the swing factor between the bull and bear cases.
Bulls vs Bears: GE Investment Factors
The bull case currently holds the stronger evidence: 15.5% revenue growth, $8.0 billion of trailing free cash flow, a 20-of-21 Buy consensus with 17.1% average target upside, and a PEG of 1.08 that rationalizes the premium multiple. The bear case is not about the business deteriorating but about price — a 37.76x trailing PE in the upper quartile of its own history, gross margin down roughly 400 basis points year-over-year, and a stock that has lagged the S&P 500 by 3.7 points over twelve months despite record results. The single most important tension is whether aftermarket service margins can hold as engine deliveries ramp and the $12 billion CPP acquisition integrates; if service margins stabilize, the premium is defensible, but if gross margin continues sliding toward the mid-30s, the multiple has room to compress toward the 2024-era low-to-mid 20s. Near-term momentum (+11.45 relative strength over one month) and a tight EPS estimate cluster of $12.91-$14.21 suggest the earnings base is safe, making multiple re-rating — not earnings — the swing factor.
Bullish
- Aftermarket annuity drives 15.5% growth: Q3 2026 revenue of $14.118 billion grew 15.52% year-over-year from $12.221 billion, with service revenue of $6.347 billion more than double product revenue of $2.653 billion. The installed base of roughly 80,000 engines generates decades-long recurring shop-visit and spare-parts revenue, giving GE earnings visibility that few industrial franchises can match.
- Analyst consensus overwhelmingly bullish: 20 of 21 analysts rate GE a Buy, with a consensus recommendation of 'strong_buy' and a mean rating of 1.478. The average target of $378.43 implies 17.1% upside from $323.24, and eight major institutions — UBS, Susquehanna, RBC, JP Morgan, Morgan Stanley, Wells Fargo, Jefferies, and Bernstein — reiterated constructive ratings between July and October.
- Free cash flow funds buybacks and dividends: Trailing free cash flow of $8.018 billion comfortably covered $1.979 billion of Q3 buybacks and $489 million of dividends while leaving $10.283 billion of cash on hand. Quarterly FCF of $1.816 billion in Q3 and $2.86 billion in Q2 shows the cash engine is durable, not a one-quarter anomaly.
- PEG of 1.08 argues premium is earned: While the 37.76x trailing PE and 27.92x EV/EBITDA sit above aerospace norms, the PEG ratio of 1.079 implies growth is being paid for at roughly fair value. An 18.98% net margin and 19.13% operating margin support a quality premium rather than a speculative one.
Bearish
- Margins compressing as deliveries ramp: Gross margin has fallen from 39.65% in Q1 2025 to 36.07% in Q1 2026 and 35.57% in Q3 2026, while operating margin slid from 23.3% in Q1 to 16.8% in Q3. Rising revenue paired with softening margins suggests pricing and cost pressure are offsetting volume leverage — the central fundamental debate.
- Valuation in upper quartile of history: The 37.76x trailing PE compares with 23.69x at year-end 2024, 32.34x at year-end 2025, and a 40.98x peak in Q2 2026, while price-to-book climbed from 9.30x to 17.60x. The market is pricing optimistic long-term expectations, leaving multiple compression as the more immediate risk if growth normalizes.
- CPP deal adds leverage and integration risk: The $12 billion Consolidated Precision Products acquisition will consume much of the $10.283 billion cash pile, with debt-to-equity already at 1.097 and a thin current ratio of 1.041. Investors must watch whether buyback pace slows or leverage ticks above 1.1x, and whether castings integration disrupts engine delivery schedules.
- Stock lagging the market badly: GE is up just 5.89% over the trailing year and 0.78% year-to-date versus S&P 500 gains of 9.59% and 7.83%, producing relative strength of -3.70 over 12 months and -7.05 YTD. The 25.07% maximum drawdown confirms the stock has already absorbed a meaningful correction and remains in repair mode.
GE Technical Analysis
GE Aerospace is in a choppy, range-bound consolidation rather than a clean trend: the stock is up just 5.89% over the trailing year and 0.78% year-to-date, materially lagging the S&P 500's 9.59% one-year and 7.83% YTD gains, as reflected in relative strength of -3.70 over 12 months and -7.05 YTD. At $323.24, the shares sit roughly 54.5% of the way through a 52-week range of $268.91 to $388.84 — closer to the midpoint than either extreme, which signals indecision rather than momentum or deep value. The 25.07% maximum drawdown confirms the stock has already absorbed a meaningful correction from its highs, leaving it in a repair phase rather than a breakout posture.\n\nShort-term momentum has turned decisively positive and is diverging from the softer longer-term picture: the stock is up 6.46% over the past month versus a 4.99% decline in SPY, producing relative strength of +11.45, and it gained 2.70% on the latest session alone. That one-month strength contrasts sharply with the -12.66% three-month change and -7.75 three-month relative strength, indicating the September-October slide to the $285 area was a washout that has since reversed. The 8.78% six-month gain and +9.32 six-month relative strength suggest the intermediate trend remains constructive even as the 12-month record stays muted. Volume of roughly 5.3 million shares on the latest up day is unremarkable, so confirmation of the rebound would require heavier participation.\n\nKey technical levels are well defined: support rests at the 52-week low of $268.91, with a secondary shelf near the October closing low of $285.64, while resistance sits at the 52-week high of $388.84 and the August peak around $381. A decisive break above $381-$389 would signal resumption of the primary uptrend and likely invite momentum buyers, whereas a loss of $285 would reopen the $269 floor and validate the downtrend. With a beta of 1.409, GE is roughly 41% more volatile than the market, meaning position sizing should account for amplified drawdowns — the 25.07% max drawdown is a realistic stress case, and a 1.4 beta implies the stock will move about 1.4x any broad market swing in either direction.
Beta
1.41
1.41x market volatility
Max Drawdown
-25.1%
Largest decline past year
52-Week Range
$269-$389
Price range past year
Annual Return
+10.3%
Cumulative gain past year
| Period | GE Return | S&P 500 |
|---|---|---|
| 1m | +11.1% | -2.4% |
| 3m | -5.0% | -2.3% |
| 6m | +21.7% | +2.8% |
| 1y | +10.3% | +11.3% |
| ytd | +6.9% | +11.4% |
Bobby - Your AI Investment Partner
Get real-time data, AI-driven personalized investment analysis to make smarter investment decisions
GE Fundamental Analysis
Revenue momentum is strong and accelerating: Q3 2026 revenue of $14.118 billion grew 15.52% year-over-year from $12.221 billion, extending a clear sequential climb from $12.392 billion in Q1 and $13.349 billion in Q2. The service segment is the growth engine at $6.347 billion versus $2.653 billion in product revenue and $934 million in insurance revenue, underscoring that aftermarket economics — not new engine shipments — drive the franchise. Trailing four-quarter revenue of roughly $52.1 billion against consensus FY estimates near $72.5 billion implies expectations for continued double-digit expansion, so any deceleration in shop-visit volume or spare-parts demand would be the key risk to the growth narrative.\n\nProfitability is robust and improving at the net line even as gross margin drifts: Q3 net income reached $2.288 billion (16.2% net margin) on gross margin of 35.57%, up from $2.157 billion and a 17.65% net margin a year earlier, while gross margin has compressed from 36.07% in Q1 and 39.65% in Q1 2025 as lower-margin engine deliveries mix into the base. Operating income of $2.374 billion produced a 16.8% operating margin in Q3, down from 23.3% in Q1, and EBITDA of $3.372 billion equates to a 23.9% EBITDA margin. The pattern — rising revenue and net income with softening gross and operating margins — is the central fundamental debate, since it suggests pricing and cost pressure are partially offsetting volume leverage.\n\nThe balance sheet is serviceable but not fortress-like: debt-to-equity stands at 1.097, the current ratio is a thin 1.041, and ROE of 46.6% is flattered by a 7.26x equity multiplier rather than pure returns on assets (ROA just 5.06%). Cash generation is the standout — trailing free cash flow of $8.018 billion, with quarterly FCF of $1.816 billion in Q3, $2.86 billion in Q2, and $1.492 billion in Q1 — comfortably funding $1.979 billion of Q3 buybacks and $489 million of dividends while still leaving $10.283 billion of cash on hand. The $12 billion CPP acquisition will consume much of that financial flexibility, so investors should watch whether buyback pace slows or leverage ticks above the current 1.1x D/E.
Quarterly Revenue
$14.1B
2026-09
Revenue YoY Growth
+15.5%
YoY Comparison
Gross Margin
35.6%
Latest Quarter
Free Cash Flow
$8.0B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
Open an Account, get $2 TSLA now!
Valuation Analysis: Is GE Overvalued?
Because GE is solidly profitable (Q3 net income of $2.288 billion), the PE ratio is the appropriate primary metric: the stock trades at 37.76x trailing earnings versus 34.71x forward, a roughly 8% compression that implies the market expects meaningful EPS growth — consistent with consensus FY EPS of $13.45 against the current run-rate. The gap is modest rather than dramatic, suggesting the forward multiple already embeds a good deal of the anticipated earnings ramp rather than offering obvious multiple-based upside.\n\nOn relative valuation, GE screens expensive across the board: a 37.76x trailing PE, 7.17x PS, 17.60x price-to-book, and 27.92x EV/EBITDA sit at clear premiums to typical aerospace and defense norms, where large-cap peers often trade in the high-teens to mid-20s on earnings. The PEG ratio of 1.079 is the one metric that argues the premium is defensible, implying growth is being paid for at roughly fair value, while the 18.98% net margin and 19.13% operating margin support a quality premium. The bull case rests on the recurring aftermarket stream and 15.5% revenue growth justifying the multiple; the bear case is that 27.9x EV/EBITDA leaves little room for margin slippage.\n\nHistorically, GE's valuation has re-rated violently: the PE ratio was 23.69x at year-end 2024, 32.34x at year-end 2025, and peaked at 40.98x in Q2 2026 before easing to 35.33x in Q3, while price-to-book climbed from 9.30x in Q4 2024 to 22.02x in Q2 2026 and now 17.60x. The current 37.76x trailing PE sits in the upper quartile of its own multi-year band, well above the 2024 average in the low-to-mid 20s, indicating the market is pricing in optimistic long-term expectations. That positioning means multiple compression, not earnings disappointment, may be the more immediate risk if growth normalizes.
PE
37.8x
Latest Quarter
vs. Historical
High-End
5-Year PE Range 11x~41x
vs. Industry Avg
37.1x
Industry PE ~37.1x*
EV/EBITDA
27.9x
Enterprise Value Multiple
Investment Risk Disclosure
Financial and operational risks center on margin erosion and balance-sheet flexibility. Gross margin has compressed from 39.65% in Q1 2025 to 35.57% in Q3 2026, and operating margin fell from 23.3% in Q1 2026 to 16.8% in Q3 as lower-margin engine deliveries mix into the base — a trend that directly threatens the premium multiple. The $12 billion CPP acquisition will absorb most of the $10.283 billion cash balance, and with debt-to-equity already at 1.097 and a current ratio of just 1.041, the company has limited room for a simultaneous demand shock and integration overrun. Revenue is also concentrated: service revenue of $6.347 billion dwarfs product revenue of $2.653 billion, so any slowdown in shop-visit volume or spare-parts demand would hit the profit engine disproportionately. Finally, ROE of 46.6% is levered by a 7.26x equity multiplier rather than asset productivity (ROA 5.06%), meaning reported returns overstate underlying capital efficiency. Market and competitive risks are dominated by valuation compression. At 37.76x trailing and 34.71x forward earnings, 7.17x sales, 17.60x book, and 27.92x EV/EBITDA, GE trades well above large-cap aerospace peers that typically command high-teens to mid-20s multiples, and its own PE history of 23.69x (2024) and 32.34x (2025) shows how violently the stock re-rates. With a beta of 1.409, GE is roughly 41% more volatile than the market, so any sector rotation out of industrials or a broad risk-off move would be amplified. Competitive threats include Honeywell's aerospace spinoff creating a new pure-play rival for investor capital and RTX showing better margin expansion per recent coverage, while the CPP deal's castings integration could disrupt supply chains if execution slips. The worst-case scenario is a chain in which aftermarket margin compression continues into 2027, CPP integration costs run over budget and push leverage above 1.1x D/E, and a slowing aerospace cycle forces analysts to cut the $13.45 FY EPS estimate — triggering multiple compression toward the 2024-era low-to-mid 20s PE. In that scenario the stock would retest the October closing low of $285.64 (about -11.6% from $323.24) and potentially the 52-week low of $268.91 (about -16.8%), consistent with the $280 analyst low target and the 25.07% maximum drawdown already experienced. A full repeat of that drawdown from current levels would imply a price near $242, roughly -25%, though the $280 low target and $268.91 floor bracket the more probable downside at -13% to -17%.
FAQ
The most severe risk is margin erosion: gross margin has fallen from 39.65% in Q1 2025 to 35.57% in Q3 2026 and operating margin from 23.3% to 16.8% in Q1-to-Q3 2026, which directly undermines the premium multiple. Second is balance-sheet and integration risk from the $12 billion CPP acquisition, which will consume most of the $10.283 billion cash pile against debt-to-equity of 1.097 and a thin 1.041 current ratio, potentially slowing the $1.979 billion quarterly buyback. Third is valuation compression: at 27.92x EV/EBITDA and 7.17x sales, any sector rotation out of industrials would be amplified by the 1.409 beta, roughly 41% more volatile than the market. Fourth is competitive and demand risk — Honeywell's aerospace spinoff creates a new pure-play rival, RTX is showing better margin expansion per recent coverage, and airline capex cuts would hit the $6.347 billion service revenue stream that drives profit.
The base case carries 50% probability with a $360-$390 target range, assuming gross margin holds in the 35-37% band, CPP integrates cleanly, and FY EPS lands near the $13.45 consensus, delivering roughly 12-20% total return toward the $378.43 average target. The bull case at 30% probability targets $400-$431, requiring gross margin recovery above 37%, service revenue growth above 15%, and multiple expansion toward the 40.98x Q2 2026 peak. The bear case at 20% probability targets $268-$290, driven by gross margin sliding toward the mid-30s, CPP overruns, and multiple compression toward the low-to-mid 20s PE seen in 2024. The base case is most likely because the tight $12.91-$14.21 EPS estimate cluster shows near-term numbers are secure, leaving multiple re-rating — not earnings — as the swing factor.
GE screens expensive on absolute metrics: 37.76x trailing earnings, 34.71x forward, 7.17x sales, 17.60x book, and 27.92x EV/EBITDA, all at premiums to large-cap aerospace peers that typically trade in the high-teens to mid-20s on earnings. Against its own history the current trailing PE sits in the upper quartile of a band that ran from 23.69x at year-end 2024 to 32.34x at year-end 2025 and peaked at 40.98x in Q2 2026, so the market is paying a premium to the recent past as well. The one metric that defends the multiple is the PEG of 1.079, which implies growth is being paid for at roughly fair value, supported by an 18.98% net margin and 19.13% operating margin. The valuation therefore implies the market expects sustained double-digit revenue growth toward the $72.5 billion consensus and stable-to-recovering aftermarket margins; if either falters, the stock is priced for disappointment rather than offering a cushion.
On risk/reward, GE offers roughly 17.1% upside to the $378.43 average analyst target from $323.24, backed by a 20-of-21 Buy consensus and a tight FY EPS estimate cluster of $12.91-$14.21 around the $13.45 midpoint, which means the near-term earnings base is well anchored. The downside is bracketed by the $280 analyst low target and the $268.91 52-week low, implying roughly 13-17% of potential loss — a moderately favorable but not lopsided skew. The biggest risk is multiple compression: at 37.76x trailing and 27.92x EV/EBITDA, the stock sits in the upper quartile of its own PE history (23.69x at year-end 2024, 32.34x at year-end 2025), so a margin slip could re-rate the shares faster than earnings can grow. It is a good buy for long-horizon investors comfortable with a 1.409 beta who accumulate on weakness toward the $285-$300 shelf rather than chasing above $380, and less attractive for traders given the 25.07% max drawdown and -12.66% three-month change.
GE fits long-term holding far better than short-term trading: the roughly 80,000-engine installed base generates decades-long recurring service revenue, giving earnings visibility that supports a multi-year thesis, while the 0.44% dividend yield and 16.68% payout ratio mean income is a minor contributor. The 1.409 beta and 25.07% maximum drawdown make it a poor vehicle for short-term traders, evidenced by the -12.66% three-month change against a +6.46% one-month rebound — sharp swings in both directions. The stock is in a repair phase, up 5.89% over twelve months versus the S&P 500's 9.59%, with relative strength of -3.70 over one year but +11.45 over one month, so timing entry matters more than exit. A minimum holding period of three to five years is appropriate to let aftermarket service economics and CPP synergies compound, sized as a core industrial position rather than a tactical trade.