GE Aerospace is the IBD Stock Of The Day as it vows to invest nearly $1 billion in its U.S. factories and supply chain. On Thursday, GE stock sought support near a buy point.
Announcing the investment on Wednesday, GE Aerospace stated that this investment nearly doubles last year's spending. The engine supplier for commercial and military jets also plans to hire 5,000 U.S. workers. It cited the need "to strengthen (domestic) manufacturing and increase the use of innovative new parts and materials needed for the future of flight."
Those efforts to expand capacity will especially target the Leap engine. The Leap powers the Boeing 737 Max and Airbus A320neo narrowbody jets. GE said it expects Leap deliveries to grow 15% to 20% this year. It is also investing in sites that will produce the new T901 Black Hawk and Apache helicopter engine for the U.S. Army.
Citi analysts said on March 6 that it's time to buy defense stocks, saying the stocks have "de-rated" while military spending grows. Current market conditions counsel building stock watchlists and waiting for the next uptrend.
GE Stock Near Buy Point, With Heico, RTX
Shares of the defense and aerospace giant fell 1.3% in Thursday's stock market action, wrestling to hold support at their 50-day moving average.
GE stock pulled back to that support level amid the market's broader sell-off. It remains slightly below the 194.80 buy point of an earnings breakout on Jan. 23, according to MarketSurge charts.
The relative strength line is trending higher and is near multiyear highs. A rising RS line, the blue line in the chart provided here, means that a stock is outperforming the S&P 500 index.
A 93 RS Rating means this top defense stock has outpaced 93% of all stocks in IBD's database over the past year. That score is up from 92 one week ago and 91 four weeks ago, MarketSurge shows.
Among other aerospace and defense stocks, Heico lost 0.8% on Thursday. The IBD 50 top growth stock has formed a cup-with-handle base with a 270.37 buy point. RTX, a jet-engine rival to GE, rose on Thursday to regain a 128.70 cup-shape buy point.
Playing Defense In A Volatile Market
GE stocks show a 21-day ATR of under 3%. So does RTX, while Heico's is 3.28%.
The average true range is a metric available on IBD's MarketSurge charting tool. It gauges the characteristic breadth of a stock's behavior. Stocks that tend to make large jumps or dives in daily action, the kind that can trigger sell rules and shake investors out of a stock, have a high ATR. Stocks that tend to make more gradual moves have lower ATRs.
In a volatile market, IBD suggests stocks with ATRs of 3 or below.
Aerospace and defense currently ranks a solid No. 20 out of 197 industry groups tracked by IBD.
GE Earnings Boom
The IBD Stock Checkup tool shows that GE stock holds a strong Composite Rating of 97 out of 99. IBD's Composite Rating rolls various fundamental and technical metrics into one easy-to-use score.
GE Aerospace stock carries an EPS Rating of 95 out of a best-possible 99.
In 2024, the company increased adjusted earnings per share by 56% as adjusted revenue grew 10%, its annual report shows. Free cash flow swelled 28% over the full year. Operating profit margin expanded by 330 basis points to 20.7%.
Analysts expect an 18% GE earnings gain in 2025 and a further 19% rise in 2026, FactSet shows.
GE Aerospace: 70,000 Jet Engines And Counting
GE Aerospace boasts an installed base of 70,000 commercial and defense engines.
The company emerged last year from the breakup of General Electric, keeping the GE ticker symbol.
Over the past 12 months, GE stock has rocketed almost 43%, including a 12% gain so far this year.
Please follow Aparna Narayanan on X @IBD_Aparna for more coverage.
