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Valued at $176.6 billion by market cap, Evendale, Ohio-based GE Aerospace (GE) is an aircraft engine supplier operating in the aerospace propulsion, services, and systems sector. The company manufactures commercial and defense aircraft engines, integrated engine components, and mechanical aircraft systems and partners with other companies to serve markets worldwide.
Companies valued at $10 billion or more are generally considered "large-cap" stocks, and GE Aerospace fits this criterion perfectly, exceeding the mark. GE Aerospace is distinguished in the market for its dominant global presence and robust revenue generation, driven by the production and servicing of nearly 70,000 commercial and military engines and bolstered by strategic partnerships such as the highly successful CFM International joint venture with Safran.
However, the jet engine maker has slipped 4.8% from its 52-week high of $170.80, achieved early last month. Despite this recent pullback, shares of GE are up 27.3% over the past three months, outperforming the broader Dow Jones Industrials Average's ($DOWI) marginal gains over the same time frame.
Over the longer term, GE is up 59.1% on a YTD basis, outpacing the DOWI's 3.2% gains. Moreover, shares of GE Aerospace have surged 92.6% over the past 52 weeks, compared to Dow Jones' 15.8% returns over the same time frame.
To confirm the bullish price trend, GE has been trading above its 50-day and 200-day moving averages since mid-November.
GE's outperformance could be attributed to its exposure to high-demand aviation platforms like the Boeing 737 MAX and the Airbus A320 neo, potential market share gains from competitors, and the spinoff from General Electric, allowing focused investment in its promising aerospace segment. Moreover, the stock surged 8.3% on April 23 following its Q1 earnings results, which showcased strong revenue growth, exceeded earnings expectations, and increased profit forecasts, driven by robust demand in the commercial aviation sector and a notable surge in total orders.
To emphasize the stock’s outperformance, top rival Honeywell International Inc. (HON) is underperforming – not just GE but the broader equity benchmarks. Shares of Honeywell International have gained 6.5% over the past 52 weeks but are marginally down on a YTD basis.
As the stock's value has soared, analysts are optimistic about its prospects. The stock has a consensus rating of "Strong Buy" from the 15 analysts covering the stock, and the mean price target of $185 represents a premium of 13.8% to current levels.
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 is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
