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Evendale, Ohio-based GE Aerospace (GE) designs and produces commercial and defense aircraft engines, integrated engine components, electric power, and mechanical aircraft systems. Valued at $176.5 billion by market cap, the global aerospace leader in attractive propulsion, services, and systems sectors with an installed base of more than 44,000 commercial and over 26,000 military aircraft engines.
Companies worth $10 billion or more are generally described as “large-cap stocks.” GE effortlessly fits that bill, with its market cap exceeding this mark, underscoring its size, influence, and dominance within the aerospace and defense industry. GE Aerospace's strength lies in its market leadership and brand legacy, rooted in a history that dates back to Thomas Edison, making it a trusted name in aerospace innovation and reliability.
Despite its notable strengths, GE slipped 9% from its 52-week high of $177.20, achieved on Jul. 23. Over the past three months, GE stock gained marginally, underperforming the Vanguard Industrials Index Fund ETF Shares (VIS) 2% gains during the same time frame.
In the longer term, shares of GE rose 57.9% on a YTD basis and climbed 78.9% over the past 52 weeks, outperforming VIS’ YTD gains of 9.2% and 17.9% returns over the last year.
To confirm the bullish trend, GE has traded above its 150-day and 200-day moving averages over the past year.
GE's strong performance can be attributed to its certainty in developmental programs and partnerships with major airlines like British Airways, Japan Airlines, and others for airplane engines, demonstrating steady demand for spare parts. The recent spin-off of GE Vernova has boosted investor confidence, while the company's promising earnings outlook and increased profitability showcase its market strength. Additionally, GE is working on a hybrid electric engine with NASA to enhance power in commercial turbofan engines.
On Jul. 23, GE shares closed up more than 5% after reporting its Q2 results. Its adjusted EPS of $1.20 topped Wall Street estimates of $0.98. The company’s adjusted revenue of $8.2 billion was about $200 million below expectations. The company raised its full-year guidance and expects adjusted EPS between $3.95 and $4.20, up from $3.80 and $4.05.
GE’s rival, Lockheed Martin Corporation (LMT), has lagged behind the stock, with a 25% uptick on a YTD basis and solid 33.7% gains over the past 52 weeks.
Wall Street analysts are highly bullish on GE’s prospects. The stock has a consensus “Strong Buy” rating from the 15 analysts covering it, and the mean price target of $197.13 suggests a potential upside of 22.3% from current price levels.
On the date of publication, Neha Panjwani did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
