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Headquartered in Evendale, Ohio, GE Aerospace (GE) specializes in the design and production of commercial and defense aircraft engines, as well as integrated engine components, electric power, and mechanical aircraft systems. With a market cap of $200 billion, the company is a global leader in aerospace propulsion and services, supporting 44,000 commercial and 26,000 military aircraft engines worldwide.
Shares of this aerospace titan have considerably outperformed the broader market considerably over the past year. GE has gained 100.1% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 35.9%. In 2024, GE stock is up 80.8%, surpassing the SPX’s 25.8% rise on a YTD basis.
Zooming in further, GE has outpaced the Industrial Select Sector SPDR Fund (XLI). The exchange-traded fund has gained about 39.6% over the past year. Moreover, GE’s gains on a YTD basis outshine the ETF’s 25.6% returns over the same time frame.
GE's robust price performance is driven by sustained demand for airplane and engine spare parts. However, shares of GE dropped 9.1% on Oct. 22 after announcing its Q3 earnings report. While revenue exceeded expectations, some segments, such as Commercial Engines & Services, underperformed. Despite an earnings per share beat, operating profit slightly missed forecasts. GE raised its full-year guidance, but the mixed results, with both positives and disappointments, were not enough to satisfy the market.
For the current fiscal year, ending in December, analysts expect GE’s EPS to grow 50.2% to $4.22 on a diluted basis. The company’s earnings surprise history is solid. It beat the consensus estimate in each of the last four quarters.
Among the 17 analysts covering GE stock, the consensus rating is a “Strong Buy.” That’s based on 15 “Strong Buy” ratings, one “Moderate Buy,” and one “Hold.”
This configuration is more bullish than two months ago, when 14 analysts gave the stock a “Strong Buy.”
On Oct, 23, BC Capital analyst Ken Herbert reduced GE Aerospace's price target to $200 from $210, maintaining an “Outperform” rating following the company's Q3 results. Supply chain issues and a shortfall in shop visits impacted the stock, and while GE raised its 2024 guidance, it now expects LEAP engine deliveries to decline by 10% for the year.
The mean price target of $210.47 represents a 14% premium to GE’s current price levels. The Street-high price target of $235 suggests an upside potential of 27.3%.
On the date of publication, Kritika Sarmah 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.
