GE Aerospace: Strong Performance Amid Challenges in Q3

With a market capitalization of $197.2 billion, GE Aerospace (GE), based in Evendale, Ohio, stands as a global leader in jet engine design and production, as well as in integrated systems and aero-derivative gas turbines. The company caters to the commercial, military, and business aviation sectors, known for both its innovative products and exceptional service.

A Large-Cap Leader in Aviation Technology

Fitting into the large-cap stock category—typically defined as companies worth over $10 billion—GE Aerospace is notable for its advancements in aircraft engine technology, its early adoption of additive manufacturing, and strong partnerships, including the significant CFM International joint venture with Safran.

Stock Performance: Recent Trends and Future Outlook

Currently, GE shares are trading 7.3% below their 52-week high of $194.80, which was reached on October 17. In the last three months, the stock has appreciated by 3.3%, a slight lag behind the iShares U.S. Aerospace & Defense ETF’s (ITA) nearly 4% return. Nevertheless, when looking at year-to-date performance, GE stock has soared by 76.7%, vastly exceeding ITA’s 21.3% gain. Over the past year, GE shares have climbed by 84.1%, while ITA’s returns stood at 26.6%.

GE has consistently traded above both its 50-day and 200-day moving averages since last year, notwithstanding some recent volatility.

Q3 Results and Market Reaction

On October 22, shares of GE fell by 9.1% following a Q3 revenue report of $8.9 billion, which missed Wall Street estimates. The setback was attributed to supply chain constraints and lower Boeing production impacting engine sales. Yet, the stock rebounded by 2.9% the following day as a result of strong order growth, with commercial engine orders up by 29% and defense business orders appreciating by 19% in Q3. This trend indicates solid demand. Additionally, delays in LEAP engine deliveries may enhance near-term aftermarket revenue as maintenance on older CFM56 engines is projected to peak in 2025 and remain robust through 2027. These factors have alleviated concerns regarding cash flow delays linked to LEAP engines, thereby boosting investor confidence.

Competitive Analysis: GE vs. Boeing

In comparison, GE’s performance stands out against its competitor, The Boeing Company (BA), which has experienced a significant drop of 32.9% over the past year and a 39.8% decline year-to-date.

Analysts Remain Optimistic

Given GE’s relative outperformance, analysts express confidence in the stock’s prospects. A consensus rating of “Strong Buy” from 17 analysts underscores this sentiment, with the stock currently trading below the mean price target of $210.47.

On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article are solely for informational purposes. For more information, please view the Barchart Disclosure Policy here.

The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.