Key Stats for GE Aerospace Stock
- Price change for GE Aerospace stock: -6%
- $GE Stock Price as of Jul. 16: $346
- 52-Week High: $383
- $GE Stock Price Target: $384
Now Live: Discover how much upside your favorite stocks could have using TIKR’s new Valuation Model (It’s free)>>>
What Happened?
GE Aerospace (GE) stock dropped 6% on Thursday even though the company beat earnings and revenue estimates and raised its full-year guidance.
Adjusted earnings came in at $2.02 per share, well above the $1.86 expected by analysts. Revenue hit $12.63 billion, also topping forecasts of $11.89 billion. Both numbers grew at a healthy clip: revenue was up 24% year-over-year, and EPS climbed 22%.
So why did GE Aerospace stock fall on a strong beat? The most likely answer is margins.
Operating margins actually shrank by 130 basis points to 21.7%, pulled down by growth in newly installed engines, ongoing investments, and inflation.
When a company beats on the top and bottom line, but margins move in the wrong direction, investors sometimes focus more on that trend than the headline numbers.
There’s another wrinkle worth understanding: spare parts delinquency, meaning shipments delayed because of material shortages, grew 20% sequentially in the quarter.
That’s a sign the company’s supply chain is still stretched even as demand keeps climbing. Management said priority supplier material input grew double digits again this quarter, and they’re working closely with suppliers to fix bottlenecks, but it’s clear this remains a work in progress.
The underlying business, though, showed real strength.
Orders rose 17% overall, with Commercial Engines & Services (CES) up 18% and Defense & Propulsion Technologies (DPT) up 12%.
Commercial Services revenue jumped 32% in the first half of the year, and total engine deliveries rose 31%, with LEAP engine deliveries up 41%.
The company’s services backlog now stands at roughly $170 billion, providing management with strong visibility into future demand.
Free cash flow was a bright spot too, growing 43% to $3 billion, with conversion above 140%. That kind of cash generation gives the company flexibility to keep investing in production and new technology.
Looking ahead, GE Aerospace raised guidance across the board.
- Full-year revenue growth is now expected in the high teens, up from the prior low-double-digit outlook.
- EPS guidance moved up to a range of $7.65 to $7.85,
- Free cash flow guidance rose to $8.9 billion to $9.2 billion.
- CES operating profit guidance was also raised, reflecting roughly $1 billion of expected improvement in Commercial Services revenue.
The company is also working through some longer-term cost pressures. LEAP engine durability upgrades are still being rolled out, and GE9X engines remain a drag on margins right now since early units cost more to produce.
Management expects those GE9X-related losses to peak by 2028 before improving.
See analysts’ growth forecasts and price targets for GE Aerospace stock (It’s free) >>>
What the Market Is Telling Us About GE Aerospace Stock
The pullback in GE Aerospace stock suggests investors are weighing near-term margin pressure and supply chain strain against otherwise strong growth and raised guidance.
With demand clearly outpacing supply in several areas, the market seems to be watching execution just as closely as the headline beat, especially heading into a second half where GE Aerospace itself says the environment remains dynamic.
Estimate a company’s fair value instantly (Free with TIKR) >>>
How Much Upside Does GE Aerospace Stock Have From Here?
With TIKR’s new Valuation Model tool, you can estimate a stock’s potential share price in under a minute.
All it takes is three simple inputs:
- Revenue Growth
- Operating Margins
- Exit P/E Multiple
If you’re not sure what to enter, TIKR automatically fills in each input using analysts’ consensus estimates, giving you a quick, reliable starting point.
From there, TIKR calculates the potential share price and total returns under Bull, Base, and Bear scenarios so you can quickly see whether a stock looks undervalued or overvalued.
See a stock’s true value in under 60 seconds (Free with TIKR) >>>
Looking for New Opportunities?
- See what stocks billionaire investors are buying so you can follow the smart money.
- Analyze stocks in as little as 5 minutes with TIKR’s all-in-one, easy-to-use platform.
- The more rocks you overturn… the more opportunities you’ll uncover. Search 100K+ global stocks, global top investor holdings, and more with TIKR.
Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
