# GE Aerospace (GE) Sector: Aerospace & defense | Field | Value | |---|---| | Price | $301.13 | | Market cap | $311B | | Intrinsic value source | Analysts | | Data as of | 2026-10-29 | | Next earnings | 2027-01-21 (estimate) | Analysts: Bullish Picks: Top pick Discount category: Below intrinsic value ## In short The market prices GE Aerospace for strong engine services but also for a costly castings deal, lower engine margins and insurance charges, and years of steady services growth can close the gap slowly. ## Themes and gap - Themes: Regulation and courts (regulation-legal) - Gap type: Slow (slow) - Why: The value depends on many years of engine services growth, and the Q4 2026 report with 2027 guidance in late January 2027 and the CPP closing in the second half of 2027 are only the first checks. ## About GE Aerospace designs, makes and services jet engines and engine parts for commercial and military aircraft. Its legal name is General Electric Company. It has two segments. Commercial Engines & Services makes engines such as the LEAP, GEnx and GE9X and earns most of its revenue from services, spare parts and shop visits for the engines in use. Defense & Propulsion Technologies makes engines and parts for military aircraft and other uses, and includes Avio Aero and Unison. Adjusted revenue was $37.5 billion in the first nine months of 2026. GE Aerospace also keeps a run-off insurance business with long-term care reserves. Its headquarters is in Evendale, Ohio, near Cincinnati. ## Thesis The market prices GE Aerospace for strong growth in engine services, but it also prices three concerns. First, GE Aerospace agreed in September 2026 to buy Consolidated Precision Products (CPP), a maker of engine castings, for $11.75 billion, with about $7 billion of cash and new debt. Second, equipment growth and inflation lowered the margin of Commercial Engines & Services to 27.2% in the first nine months of 2026, from 28.5% a year earlier. Third, the run-off insurance business recorded a pre-tax charge of $328 million in Q3 2026 for higher long-term care costs. For the gap to close, three things must be true. Commercial services revenue must grow by a low double-digit percentage in 2027, as the company now expects, from a backlog of more than $170 billion. Free cash flow must stay above 100% of adjusted net income while engine deliveries rise. CPP must close in the second half of 2027 and add to adjusted EPS and free cash flow in its first year, as the company expects. The Q4 2026 report and the 2027 guidance, expected in late January 2027, are the next test. The CPP closing is a second test. If these checks pass, the gap can close slowly over several years, because the value depends on services cash flows for decades. The main reason it may not close is a slower aftermarket, for example if airlines retire older engines or if new engines need fewer shop visits. ## Checkpoints - Jan 21, 2027 (estimate): Q4 2026 results and 2027 guidance. Status: Pending. Watch: 2026 adjusted EPS of $8.00 to $8.10, free cash flow of $9.1 billion to $9.4 billion and 2027 guidance with low double-digit services growth pass; a lower services outlook or weaker cash conversion fail. - 2027 (estimate): CPP acquisition closes. Status: Pending. Watch: Regulatory approval and a closing in the second half of 2027 with a first-year gain to adjusted EPS pass; a block, a delay into 2028 or a higher cost fail. ## Balance sheet - Cash: $10.3B - Debt: $19.3B - Net debt: $9.1B - Interest cover: 12× - Undrawn credit line: $3.0B - Debt due within 12 months: $2.3B - Ratings: Moody's A2 (positive outlook), S&P A- (positive outlook) GE Aerospace funds itself with long-term notes, a new commercial paper program and cash from operations. Total borrowings were $19.33 billion at September 30, 2026, down from $20.49 billion at December 31, 2025, because some notes matured. Short-term borrowings of $2.34 billion include $480 million of commercial paper, a program that started in Q3 2026. Cash is cash, cash equivalents and restricted cash of $8.76 billion plus time deposits of $1.5 billion at September 30, 2026. Cash in discontinued operations is not included. Interest cover is operating profit (non-GAAP) divided by interest and other financial charges for the first nine months of 2026. The undrawn credit is a five-year revolving credit facility of $3.0 billion that matures in 2029. On February 2, 2026, Moody's raised the long-term rating to A2. The company plans to pay about $7 billion of cash and to borrow the rest of the $11.75 billion for CPP in the second half of 2027. In 2026, it bought back 11.9 million shares for $4.0 billion under its $20 billion authorization. As of 2026-09-30. Sources: - https://www.sec.gov/Archives/edgar/data/40545/000004054526000064/ge-20260930.htm - https://www.sec.gov/Archives/edgar/data/40545/000004054526000063/ge3q2026earningsrelease.htm - https://www.sec.gov/Archives/edgar/data/40545/000095014226002501/eh260827362_ex9901.htm ## Dividends - Dividend yield: 0.6% (last 12 months, at the current price) - Paid per share, last 12 months: $1.77 (4 payments) - Current annual rate: $1.88 ($0.47 x 4 a year) - Payout ratio: 18% of the earnings of the last fiscal year (the year ended 2025-12-31) - Latest ex-dividend date: 2026-10-05, $0.47 per share - Growth over the last 5 years: 54.8% a year - Growth over the last 10 years: -8.7% a year Dividends per share by year: 2016: $4.457, 2017: $4.0256, 2018: $1.7732, 2019: $0.1994, 2020: $0.1994, 2021: $0.1994, 2022: $0.1994, 2023: $0.2554, 2024: $1.12, 2025: $1.44. Source: company filings and market data, read on 2026-10-29. ## Recent events - 2026-10-20: GE Aerospace reported Q3 2026 results. Orders rose 49% to $19.0 billion, adjusted revenue rose 18% to $13.3 billion, and adjusted EPS rose 36% to $2.25. Free cash flow fell 14% to $2.0 billion. The company raised its 2026 guidance to adjusted EPS of $8.00 to $8.10, operating profit of $10.9 billion to $11.0 billion and free cash flow of $9.1 billion to $9.4 billion. It expects commercial services revenue to grow by a low double-digit percentage in 2027. The run-off insurance business recorded a pre-tax charge of $328 million after its annual review of reserves. - 2026-09-08: GE Aerospace agreed to buy Consolidated Precision Products (CPP), a maker of castings for aircraft engines, defense and power, for $11.75 billion. It plans to pay with about $7 billion of cash and new debt for the rest. It expects CPP to have revenue of about $2.0 billion in 2027 and the deal to close in the second half of 2027, subject to regulatory approvals. - 2026-07-16: GE Aerospace reported Q2 2026 results. Adjusted revenue rose 24% to $12.6 billion, adjusted EPS rose 22% to $2.02, and free cash flow rose 43% to $3.0 billion. The company raised its 2026 adjusted EPS guidance to $7.65 to $7.85, from $7.10 to $7.40. - 2026-04-21: GE Aerospace reported Q1 2026 results. Orders rose 87% to $23.0 billion, adjusted revenue rose 29% to $11.6 billion, and adjusted EPS rose 25% to $1.86. The company kept its 2026 guidance and said that results were trending to the high end. - 2026-02-02: Moody's raised GE Aerospace's long-term rating to A2 from A3 and its short-term rating to P-1 from P-2, with a positive outlook. On April 16, 2026, S&P changed its outlook to positive and kept its A- rating. - 2026-01-22: GE Aerospace reported Q4 2025 results. For 2025, adjusted revenue rose 21% to $42.3 billion, operating profit was $9.1 billion, adjusted EPS was $6.37 and free cash flow was $7.7 billion. The company gave first 2026 guidance of adjusted EPS of $7.10 to $7.40. ## Latest news and filings - Last earnings: 2026-10-20 (8-K: https://www.sec.gov/Archives/edgar/data/40545/000004054526000063/) - Next earnings: 2027-01-21 (expected; the company has not confirmed it) | Filed | Form | Headline | Period end | XBRL document | Link | | --- | --- | --- | --- | --- | --- | | 2026-10-20 | 10-Q | Quarterly report for the period ended Sep 30, 2026 | 2026-09-30 | ge-20260930 | https://www.sec.gov/Archives/edgar/data/40545/000004054526000064/ge-20260930.htm | | 2026-10-20 | 8-K | Earnings release | | ge-20261020 | https://www.sec.gov/Archives/edgar/data/40545/000004054526000063/ge-20261020.htm | | 2026-09-22 | 8-K | Change of directors or officers and Other company news | | ge-20260921 | https://www.sec.gov/Archives/edgar/data/40545/000004054526000059/ge-20260921.htm | | 2026-09-08 | 8-K | Investor disclosure and Other company news | | | https://www.sec.gov/Archives/edgar/data/40545/000095014226002501/eh260827362_8k.htm | | 2026-07-16 | 10-Q | Quarterly report for the period ended Jun 30, 2026 | 2026-06-30 | ge-20260630 | https://www.sec.gov/Archives/edgar/data/40545/000004054526000049/ge-20260630.htm | | 2026-07-16 | 8-K | Earnings release | | ge-20260716 | https://www.sec.gov/Archives/edgar/data/40545/000004054526000047/ge-20260716.htm | | 2026-06-25 | 8-K | Change to shareholder rights or bylaws | | ge-20260625 | https://www.sec.gov/Archives/edgar/data/40545/000004054526000042/ge-20260625.htm | | 2026-06-11 | 8-K | Change of directors or officers | | ge-20260608 | https://www.sec.gov/Archives/edgar/data/40545/000004054526000039/ge-20260608.htm | | 2026-05-07 | 8-K | Change of directors or officers and Shareholder vote results | | ge-20260505 | https://www.sec.gov/Archives/edgar/data/40545/000004054526000032/ge-20260505.htm | | 2026-04-21 | 10-Q | Quarterly report for the period ended Mar 31, 2026 | 2026-03-31 | ge-20260331 | https://www.sec.gov/Archives/edgar/data/40545/000004054526000027/ge-20260331.htm | Every filing on SEC EDGAR (CIK 40545): https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0000040545&type=&dateb=&owner=include&count=40 ## Risks - High: Most of the profit comes from services on engines in use. If airlines fly less, retire older engines earlier or need fewer shop visits, services revenue and margins can fall. The price of the stock assumes many years of services growth. - Medium: The run-off insurance business had net future policy benefit reserves of $32.8 billion at September 30, 2026, mostly for long-term care. The annual review in Q3 2026 caused a pre-tax charge of $328 million. Higher care costs or lower interest rates can cause new charges or require capital. - Medium: The CPP acquisition costs $11.75 billion and needs regulatory approval. GE Aerospace will use about $7 billion of cash and new debt. If the deal is late, is blocked or does not add to earnings, it lowers cash for buybacks. - Medium: Supplier output limits engine deliveries. Equipment growth and inflation lowered the margin of Commercial Engines & Services in 2026. Revenue from GE9X deliveries waits for a certification step, so delays can move profit to later periods. ## Links - Page: https://picks.utilarium.app/company/GE/ - History of changes: https://picks.utilarium.app/company/GE/history/ - JSON with full history: https://picks.utilarium.app/data/company/GE.json > Picks is a personal record of stock picks. It gives general information only, not financial, investment, tax or legal advice, and not advice for your situation. It is not a recommendation to buy or sell. Kevin may hold any stock on this site. Prices, intrinsic values and ratings can be delayed or wrong; check the original source. Full disclaimer: /disclaimer/.