GE Aerospace
GE
$313.83
+0.59%
GE Aerospace is the world's leading designer and manufacturer 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 distilled remnant of the 1892 General Electric conglomerate, having spun off appliances, finance, healthcare, and power/wind businesses between 2016 and 2024, leaving a pure-play aerospace franchise with an oligopolistic commercial engine position alongside RTX's Pratt & Whitney and Rolls-Royce. The current investor debate centers on whether the post-spinoff earnings transformation can continue at pace: commercial engine demand and shop-visit volume are strong, but recent headlines flag margin compression amid cost pressures, a premium valuation, and integration risk from the $12 billion acquisition of Consolidated Precision Products, a move aimed at securing mission-critical castings capacity in a supply-constrained aerospace supply chain. Bulls point to the recurring service annuity and the CPP deal's earnings accretion, while skeptics highlight decelerating relative performance, a stretched multiple, and the risk that supply-chain investments dilute near-term returns.…
GE
GE Aerospace
$313.83
Related headlines
Investment Opinion: Should I buy GE Today?
Rating: Hold with a bias toward accumulating on weakness. The core thesis is that GE's oligopolistic aftermarket annuity and 21% revenue growth justify a premium multiple, but current margin compression and a stretched valuation limit near-term upside. The analyst consensus is Buy (mean 1.52) with an average target of $391.19, implying 24.7% upside, yet the stock's 10% three-month drawdown and relative underperformance suggest caution.
Supporting evidence includes: 21.11% YoY revenue growth in Q2 2026 to $13.349 billion; a PEG ratio of 1.075 indicating fair growth pricing; forward PE of 34.44x versus trailing 37.75x, implying expected earnings expansion; and a 19.0% net margin with 46.6% ROE, both superior to sector averages. However, gross margin has compressed to 35.03% from 37.89% a year ago, and free cash flow yield is only 2.6%. The stock trades at 6.6x EV/Sales and 27.9x EV/EBITDA, well above defense peers.
Key risks that could invalidate the thesis include continued margin deterioration, CPP integration challenges, and a valuation re-rating toward historical levels. The rating would upgrade to Buy if gross margins stabilize above 36% and the stock pulls back to the $290-300 range (forward PE ~23x), or downgrade to Sell if operating margins fall below 17% or revenue growth decelerates below 15%. Relative to its own history and peers, GE is overvalued on near-term metrics but fairly valued on a growth-adjusted basis; the premium is justified only if margin recovery materializes.
Sign up to view all
GE 12-Month Price Forecast
GE presents a balanced risk/reward at current levels: the aftermarket annuity and strong revenue growth support the premium multiple, but margin compression and relative underperformance argue for caution. The stock's 14.3% downside to the 52-week low is meaningful, while the 24.7% upside to the average target is attractive if margins stabilize. I would upgrade to bullish if Q3 results show gross margin recovery above 36% and the stock holds above $300; I would downgrade to bearish if margins fall below 34% or the CPP deal strains the balance sheet. The neutral stance reflects the tension between strong fundamentals and a valuation that already prices in optimistic expectations.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on GE Aerospace's 12-month outlook, with a consensus price target around $391.19 and implied upside of +24.6% versus the current price.
Average Target
$391.19
0 analysts
Implied Upside
+24.6%
vs. current price
Analyst Count
—
covering this stock
Price Range
$305 - $435
Analyst target range
Coverage is deep and uniformly constructive: 21 analysts cover GE Aerospace with a consensus recommendation of "Buy" (mean rating of 1.52 on a 1-5 scale where 1 is Strong Buy), and the average target price of $391.19 implies roughly 24.7% upside from the current $313.83. The consensus leans clearly bullish, and the institutional ratings flow reinforces it — Jefferies reiterated Buy on September 23, 2026, and the July 2026 slate shows a clean sweep of reaffirmations from Bernstein (Outperform), JP Morgan (Overweight), RBC Capital (Outperform), UBS (Buy), TD Cowen (Buy), Susquehanna (Positive), and Citigroup (Buy), with no downgrades in the visible record. The absence of negative revisions despite a 10% three-month drawdown suggests analysts view the pullback as a buying opportunity rather than a fundamental deterioration. The target range of $305 to $435 is wide — a 42.6% spread from low to high — signaling meaningful disagreement about the path forward; notably, the $305 low target sits just 2.8% below the current price, implying even the most cautious analyst sees the stock as roughly fairly valued rather than overvalued. The $435 high target likely assumes successful CPP integration, sustained 20%+ revenue growth, service-margin recovery, and multiple expansion toward the upper end of the historical band, while the low target prices in margin compression and supply-chain integration friction. Consensus FY EPS estimates are tightly clustered at $12.66-$13.49 around a $12.98 average, and revenue estimates of $69.1-$72.6 billion (average $70.5 billion) show similarly high conviction on the top line — a tight earnings and revenue spread paired with a wide price-target spread indicates analysts agree on the business trajectory but disagree on how much multiple the market should pay for it.
Drowning in data?
Find the real signal!
Bulls vs Bears: GE Investment Factors
The bear case currently has stronger near-term evidence: GE has underperformed the S&P 500 by 10.86 points over the past year, margin compression is visible across gross and operating lines, and the stock sits near the top of its historical valuation band with a 37.75x trailing PE. However, the bull case rests on a durable aftermarket annuity, 21% revenue growth, and unanimous analyst support with a $391.19 average target. The single most important tension is whether the margin decline is a temporary mix issue or a structural threat to the premium multiple—if gross margins stabilize above 35% and the CPP integration proceeds smoothly, the stock can re-rate higher; if margins continue to erode, the multiple could compress toward 2024-2025 levels, implying significant downside even without an earnings miss.
Bullish
- Oligopolistic aftermarket annuity: GE's installed base of roughly 80,000 commercial and military engines generates decades-long service contracts, and services revenue of $6.347 billion in Q2 2026 dwarfed product revenue of $2.653 billion. This recurring, high-margin stream provides exceptional earnings visibility and pricing power that few industrials can match.
- Revenue accelerating at 21% YoY: Q2 2026 revenue of $13.349 billion grew 21.11% year-over-year, with sequential gains from $12.392 billion in Q1 2026 and $12.717 billion in Q4 2025. Consensus FY revenue of $70.5 billion implies continued double-digit expansion, well above the sector's typical mid-single-digit growth.
- Analyst consensus strongly bullish: All 21 covering analysts rate GE a Buy (mean 1.52), with an average target of $391.19 implying 24.7% upside from $313.83. The absence of downgrades despite a 10% three-month drawdown suggests the pullback is viewed as a buying opportunity.
- PEG ratio signals fair growth pricing: At 37.75x trailing earnings but 34.44x forward earnings, the PEG ratio of 1.075 indicates the premium multiple is broadly justified by expected earnings growth. Forward PE compression of ~9% implies the market expects meaningful EPS expansion to $12.98.
Bearish
- Relative performance deteriorating sharply: GE is up just 4.67% over the past year versus SPY's 15.53% gain, a -10.86 point relative gap, and down 2.16% YTD against SPY's +11.93%. The three-month relative strength of -12.72 points signals a clear loss of momentum and possible sector rotation away from the stock.
- Margin compression evident: Gross margin fell to 35.03% in Q2 2026 from 37.89% a year earlier and 39.65% in Q1 2025, while operating margin slipped to 18.65% from 23.33% in Q1 2026. The mix-driven decline, partly from lower-margin insurance revenue, raises questions about the durability of the premium valuation.
- Premium valuation leaves no room for error: At 37.75x trailing PE, 6.6x EV/Sales, and 27.9x EV/EBITDA, GE trades at a 60-80% premium to the Aerospace & Defense sector. The PE has climbed from 23.7x at year-end 2024 to 37.75x today, placing the stock near the top of its multi-year valuation band.
- Leverage and liquidity constraints: Debt-to-equity of 1.097 and a current ratio of just 1.041 leave limited cushion, while the $12 billion CPP deal may require incremental debt. Free cash flow yield of only 2.6% ($8.396 billion on a $328.7 billion market cap) is modest for a premium industrial.
GE Technical Analysis
GE Aerospace is in a medium-term corrective phase within a longer-term uptrend that has largely stalled: the stock is up just 4.67% over the past year versus a 15.53% gain for the S&P 500, a relative strength gap of -10.86 percentage points, and it is down 2.16% year-to-date against SPY's +11.93%. At $313.83, the shares sit at roughly 37.4% of the 52-week range of $268.91 to $388.84, having surrendered most of the ground gained during the June-July run to $381.22. That positioning is neither a momentum breakout nor a deep-value falling knife — it is a stock that has given back a meaningful portion of its highs and is now testing whether the prior uptrend structure holds. Recent momentum is clearly negative and diverging from the flat 1-year trend: the stock is down 10.03% over three months (versus SPY +2.69%, a -12.72 point relative gap) and has essentially flatlined over the past month at +0.30% (versus SPY +1.22%, relative strength -0.92), suggesting the selling pressure has paused but not reversed. The sequence of lower highs from the August peak of $381.22 through September's $327.09 and October's $313.83, combined with a 20.97% maximum drawdown from the high, points to a distribution phase rather than a healthy consolidation; the modest +0.59% single-day gain on the latest close is not yet evidence of a bottom. Key technical levels are well defined: support sits at the 52-week low of $268.91, roughly 14.3% below the current price, while resistance is the 52-week high of $388.84, about 23.9% above — a wide 44.6% band that reflects the stock's high volatility. With a beta of 1.374, GE is roughly 37% more volatile than the market, meaning position sizing should be scaled down accordingly; a decisive break below $300 would likely open a path toward the $268.91 low, whereas reclaiming the $340-350 zone (the September breakdown area) would be the first sign of trend repair, and a move through $388.84 would signal a new leg higher.
Beta
1.37
1.37x market volatility
Max Drawdown
-21.0%
Largest decline past year
52-Week Range
$269-$389
Price range past year
Annual Return
+4.7%
Cumulative gain past year
| Period | GE Return | S&P 500 |
|---|---|---|
| 1m | +0.3% | +0.2% |
| 3m | -10.0% | +2.9% |
| 6m | +3.2% | +8.4% |
| 1y | +4.7% | +14.9% |
| ytd | -2.2% | +11.9% |
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 robust and accelerating: Q2 2026 revenue of $13.349 billion grew 21.11% year-over-year against $11.022 billion in Q2 2025, and the sequential progression from $12.392 billion in Q1 2026 and $12.717 billion in Q4 2025 confirms a steadily rising top line. The service-heavy mix is the engine of this growth — services contributed $6.347 billion versus $2.653 billion in product revenue in the disclosed segment split — which is exactly the high-margin recurring annuity that underpins the bull case, though the inclusion of $934 million in insurance revenue adds a less strategically relevant line. Trailing four-quarter revenue of roughly $51.7 billion against consensus FY estimates near $70.5 billion implies the Street expects continued double-digit expansion, consistent with the commercial engine strength highlighted in recent coverage, but the 21% growth rate also raises the bar for future comparisons. Profitability is strong but showing signs of margin pressure: Q2 2026 net income was $2.37 billion (17.75% net margin) on a 35.03% gross margin, down from 37.89% gross margin in Q2 2025 and 39.65% in Q1 2025, while operating margin slipped to 18.65% from 23.33% in Q1 2026. The compression is partly mix-driven — the lower-margin insurance line and ramping product deliveries — but it is the central fundamental debate, echoed in headlines questioning whether GE can boost margins amid cost pressures; still, net margin has held in the 15-20% band across the last six quarters, and ROE of 46.6% reflects a highly capital-efficient, buyback-shrunk equity base. The balance sheet is solid but not fortress-like: debt-to-equity of 1.097 and a current ratio of just 1.041 leave limited liquidity cushion, while trailing free cash flow of $8.396 billion against a $328.7 billion market cap yields only about 2.6% — modest for a premium industrial. Positively, Q2 2026 operating cash flow of $3.195 billion funded $2.128 billion of buybacks and $492 million of dividends with room to spare, and the company retired $986 million of debt in the quarter; however, the $12 billion CPP acquisition will likely require incremental debt or cash, which bears watching given the already-elevated leverage and thin current ratio.
Quarterly Revenue
$13.3B
2026-06
Revenue YoY Growth
+21.1%
YoY Comparison
Gross Margin
35.0%
Latest Quarter
Free Cash Flow
$8.4B
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 Aerospace is solidly profitable — Q2 2026 net income of $2.37 billion and positive trailing EPS — the PE ratio is the appropriate primary metric. The stock trades at 37.75x trailing earnings but only 34.44x forward earnings (based on consensus FY EPS of $12.98), a roughly 9% compression that implies the market expects meaningful earnings growth over the next twelve months; the PEG ratio of 1.075 suggests that growth is being priced at a broadly fair rate relative to the multiple, which is the strongest single argument for the current valuation. Against the Aerospace & Defense industry, GE's 37.75x trailing PE and 6.6x EV/Sales sit at a clear premium to the sector's typical mid-to-high-teens to low-20s earnings multiple — a spread of roughly 60-80% — and its 27.9x EV/EBITDA is elevated versus defense primes that generally trade in the low-to-mid teens. That premium is defensible on quality grounds: a 19.0% net margin, 46.6% ROE, and an oligopolistic aftermarket annuity are superior to most peers, but the 17.6x price-to-book and 38.5x price-to-cash-flow leave little room for execution error, and the recent margin compression argues the premium is already fully earned. Historically, GE's valuation has re-rated dramatically: the PE ratio has climbed from 23.7x at year-end 2024 and 32.4x at year-end 2025 to 37.75x today, while price-to-sales has expanded from 16.6x (Q4 2024) to 25.8x (Q4 2025) and now 7.2x on the current trailing basis after the revenue base scaled up. The stock is therefore near the top of its own multi-year valuation band, meaning the market is pricing in optimistic expectations for continued double-digit growth and margin recovery; any disappointment on the CPP integration or service margins could compress the multiple toward its 2024-2025 levels, implying meaningful downside even without an earnings miss.
PE
37.7x
Latest Quarter
vs. Historical
High-End
5-Year PE Range 3x~41x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
27.9x
Enterprise Value Multiple
Investment Risk Disclosure
Financial and operational risks center on margin pressure and balance-sheet flexibility. Gross margin has fallen from 39.65% in Q1 2025 to 35.03% in Q2 2026, and operating margin dropped to 18.65% from 23.33% in Q1 2026, partly due to lower-margin insurance revenue ($934 million) and ramping product deliveries. The $12 billion CPP acquisition could strain a balance sheet with debt-to-equity of 1.097 and a current ratio of only 1.041, while free cash flow yield of 2.6% offers limited buffer. Additionally, revenue concentration in commercial engines and the CFM joint venture exposes GE to cyclical aerospace demand and supply-chain disruptions.
Market and competitive risks include valuation compression and sector rotation. At 37.75x trailing PE and 27.9x EV/EBITDA, GE trades at a 60-80% premium to defense primes, leaving little room for execution missteps. The stock's beta of 1.374 means it is roughly 37% more volatile than the market, amplifying downside in a risk-off environment. Recent news highlights margin concerns and competitive pressure from RTX's Pratt & Whitney, which is noted for better margin expansion. A rotation away from premium industrials or a delay in aerospace recovery could trigger multiple contraction.
Worst-case scenario: a combination of continued margin erosion, CPP integration friction, and a broader aerospace downturn could drive the stock toward its 52-week low of $268.91, representing a 14.3% decline from $313.83. If the multiple compresses to the 2024-2025 level of ~23-32x on forward EPS of $12.98, the implied price range is $298-$415, but a miss on earnings could push the stock below $300. The maximum drawdown over the past year was 20.97%, and a repeat would target ~$248, though the 52-week low provides a more concrete downside reference. Investors could lose 14-21% in a severe adverse scenario.
FAQ
The most severe risk is margin compression: gross margin fell to 35.03% from 37.89% a year ago, and operating margin dropped to 18.65% from 23.33% in Q1 2026. Second, valuation risk: at 37.75x trailing PE, any earnings miss could trigger multiple compression toward 2024-2025 levels, implying 20-30% downside. Third, integration risk from the $12 billion CPP acquisition, which could strain a balance sheet with debt-to-equity of 1.097 and a current ratio of 1.041. Fourth, macro and competitive risk: beta of 1.374 amplifies market downturns, and RTX's Pratt & Whitney is noted for better margin expansion.
Our 12-month forecast has a base case (55% probability) of $340-$391, assuming revenue near $70.5 billion and EPS around $12.98 with stable margins. The bull case (25% probability) targets $391-$435 on successful CPP integration and margin recovery above 37%. The bear case (20% probability) targets $269-$305 if margins deteriorate and the multiple compresses. The most likely scenario is the base case, where GE grows into its valuation but near-term multiple expansion is limited. The key assumption is that gross margins stabilize in the 35-36% range.
GE appears overvalued on near-term metrics but fairly valued on a growth-adjusted basis. Its trailing PE of 37.75x is a 60-80% premium to the Aerospace & Defense sector, and EV/EBITDA of 27.9x is well above defense primes in the low-to-mid teens. However, the PEG ratio of 1.075 suggests the premium is justified by expected earnings growth, and forward PE of 34.44x implies the market expects EPS to rise to $12.98. The stock is near the top of its multi-year valuation band, meaning the market is pricing in optimistic expectations for margin recovery and continued double-digit growth.
GE offers a compelling long-term buy case with 24.7% upside to the analyst average target of $391.19, but near-term risks are elevated. The stock trades at 37.75x trailing earnings, a premium to peers, and has underperformed the S&P 500 by 10.86 points over the past year. The biggest downside risk is a continued margin compression that could push the stock toward its 52-week low of $268.91, a 14.3% decline. For long-term investors with a 2-3 year horizon, the aftermarket annuity and 21% revenue growth justify accumulating on weakness, but short-term traders may want to wait for a technical bottom above $300.
GE is best suited for long-term investment given its 80,000-engine installed base, decades-long service contracts, and 21% revenue growth, which provide earnings visibility over multiple years. The stock's beta of 1.374 and 20.97% max drawdown make it unsuitable for short-term trading unless using tight risk controls. A dividend yield of 0.44% is modest, so total return depends on capital appreciation. We suggest a minimum holding period of 2-3 years to ride out the current corrective phase and benefit from the aftermarket annuity and CPP accretion.
