GE Aerospace is the world's leading jet and turboprop engine maker, operating as a pure-play aerospace company following the completion of GE's historic three-way breakup. GE HealthCare (GEHC) was spun off in January 2023, and GE Vernova (GEV) — the power and renewables business — was spun off in April 2024, leaving GE Aerospace as the standalone entity. Prior to these spinoffs, GE was a diversified industrial conglomerate with revenues exceeding $56B (FY2021), encompassing aerospace, power, renewables, and healthcare. Post-spin, GE Aerospace generated $45.9B in pure aerospace revenue in FY2025.
The company operates through two segments: Commercial Engines & Services (CES) — the design, manufacture, and servicing of jet engines for commercial airframes (narrowbody LEAP via CFM joint venture with Safran, widebody GE9X/GEnx, business aviation) — and Defense & Propulsion Technologies (DPT) — engines and critical systems for military aircraft. Brands include Avio Aero, Unison, and Dowty Propellers.
The services and aftermarket business is the profit engine. With an installed base of ~44,000 commercial engines and contractual long-term service agreements (LTSAs), GE Aerospace collects high-margin shop-visit revenue as engines age. The LEAP engine (Boeing 737 MAX, Airbus A320neo family) is now the dominant narrowbody engine and its shop-visit ramp represents a decade-long revenue annuity.
Investment Thesis
GE Aerospace is the premier aftermarket annuity play in commercial aviation. The LEAP narrowbody engine is now the world's best-selling jet engine, powering the Boeing 737 MAX and Airbus A320neo — the dominant narrowbody platforms for the next 20+ years. As the ~8,000-strong LEAP installed base ages into its first shop-visit window, GE's high-margin services revenue will compound for years regardless of new aircraft deliveries.
Bull drivers: Services mix shift drives structural margin expansion. FLIGHT DECK lean operating system (inherited from Danaher) is delivering real SG&A discipline. FCF surged to $7.3B in FY2025 ($6.83/share), supporting aggressive buybacks ($7.6B in FY2025) and a growing dividend. Commercial Engines orders jumped 93% to $17.3B in Q1 2026, confirming demand depth. Defense DPT provides geopolitical diversification.
Key risks: Premium multiple (40.6x TTM P/E) requires sustained services execution. LEAP durability and hot-section shop-visit timing uncertainty. Widebody GE9X/787 exposure to China travel recovery. Supply chain constraints limit engine production upside. A meaningful air-travel recession would compress shop-visit volume.
| Metric | FY2021 ⚠ | FY2022 ⚠ | FY2023 ⚠ | FY2024 ⚠ | FY2025 |
|---|---|---|---|---|---|
| Revenue | $56.47B | $29.14B | $35.35B | $38.70B | $45.86B |
| Revenue Growth | N/A | — | — | — | +18.5% |
| Gross Profit | $13.09B | $10.15B | $12.41B | $14.39B | $16.89B |
| Gross Margin | 23.2% | 34.8% | 35.1% | 37.2% | 36.8% |
| Operating Income | $1.06B | $3.60B | $4.72B | $6.76B | $8.77B |
| Operating Margin | 1.9% | 12.3% | 13.3% | 17.5% | 19.1% |
| EBITDA | -$1.55B | $4.05B | $12.65B | $9.79B | $12.06B |
| Net Income | -$6.34B | $0.34B | $9.48B | $6.56B | $8.70B |
| EPS (Diluted) | -$6.16 | $0.04 | $8.36 | $5.99 | $8.16 |
| Net Margin | -11.2% | 1.2% | 26.8% | 16.9% | 19.0% |
| Metric | FY2021 ⚠ | FY2022 ⚠ | FY2023 ⚠ | FY2024 | FY2025 |
|---|---|---|---|---|---|
| Cash & ST Investments | $28.07B | $23.42B | $20.91B | $14.60B | $12.39B |
| Total Assets | $198.9B | $188.9B | $176.1B | $125.8B | $130.2B |
| Total Debt | $38.03B | $26.15B | $21.76B | $20.38B | $20.49B |
| Net Debt | $22.26B | $10.34B | $6.56B | $6.76B | $8.10B |
| Stockholders' Equity | $40.31B | $33.70B | $27.40B | $19.34B | $18.68B |
| Current Ratio | 1.28x | 1.18x | 1.33x | 1.09x | 1.04x |
| Debt/Equity | 0.94x | 0.78x | 0.79x | 1.05x | 1.10x |
| Book Value/Share | $36.71 | $30.74 | $25.16 | $17.83 | $17.50 |
| Metric | FY2021 ⚠ | FY2022 ⚠ | FY2023 ⚠ | FY2024 | FY2025 |
|---|---|---|---|---|---|
| Operating Cash Flow | $3.48B | $5.92B | $5.18B | $4.71B | $8.54B |
| Capital Expenditures | -$1.11B | -$1.17B | -$1.60B | -$1.03B | -$1.27B |
| Free Cash Flow | $2.37B | $4.74B | $3.58B | $3.68B | $7.26B |
| FCF Margin | 4.2% | 16.3% | 10.1% | 9.5% | 15.8% |
| Dividends Paid | -$575M | -$639M | -$589M | -$1.01B | -$1.45B |
| Share Buybacks | -$107M | -$1.05B | -$1.23B | -$5.83B | -$7.55B |
| CapEx % of Revenue | 2.0% | 4.0% | 4.5% | 2.7% | 2.8% |
| Multiple | FY2022 | FY2023 | FY2024 | FY2025 (Current Price) |
|---|---|---|---|---|
| P/E Ratio (TTM) | 170x† | 11.7x | 27.6x | 40.6x |
| Fwd P/E (FY2027E) | — | — | — | 38.5x |
| P/S Ratio | 1.96x | 3.14x | 4.68x | 7.5x |
| P/B Ratio | 1.70x | 4.05x | 9.36x | 18.5x |
| P/FCF Ratio | 12.1x | 30.9x | 49.2x | 47.6x |
| EV/EBITDA | 16.7x | 9.3x | 19.2x | 29.3x‡ |
| EV/Sales | 2.3x | 3.3x | 4.9x | 7.7x |
| Metric | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|
| Return on Equity | 1.0% | 34.6% | 33.9% | 46.6% |
| Return on Assets | 0.2% | 5.4% | 5.2% | 6.7% |
| Return on Invested Capital | 2.2% | 2.9% | 6.3% | 8.1% |
| Asset Turnover | 0.15x | 0.20x | 0.31x | 0.35x |
| Operating Margin | 12.3% | 13.3% | 17.5% | 19.1% |
| FCF / Revenue | 16.3% | 10.1% | 9.5% | 15.8% |
| Interest Coverage (EBIT/Int) | 2.7x | 4.6x | 6.9x | 10.4x |
| SG&A / Revenue | 19.7% | 18.9% | 16.4% | 8.9% |
| Metric | FY2025A | FY2027E | FY2028E | FY2029E |
|---|---|---|---|---|
| Revenue (Avg) | $45.86B | $53.23B | $58.17B | $62.12B |
| Rev Growth (vs FY2025) | — | +16.1% | +26.9% | +35.5% |
| EPS (Avg) | $8.16 | $8.60 | $9.84 | $10.89 |
| EBITDA (Avg) | $12.06B | $10.49B | $11.46B | $12.24B |
| Fwd P/E (at $331.06) | 40.6x | 38.5x | 33.6x | 30.4x |
| Name | Title | Type | Shares | Price | Date |
|---|---|---|---|---|---|
| Darren W McDew | Director | Award | 678 | — | May 5 |
| Catherine A Lesjak | Director | Award | 678 | — | May 5 |
| Thomas W Horton | Director | Award | 678 | — | May 5 |
| Isabella D Goren | Director | Award | 678 | — | May 5 |
| Riccardo Procacci | SVP | RSU/Tax | 966 vested / 416 withheld | $286.51 | May 1 |
| John R Phillips III | SVP | RSU/Tax | 2,255 vested / 1,109 withheld | $286.51 | May 1 |
| Christian Meisner | SVP | RSU/Tax | 2,255 vested | — | May 1 |
LEAP aftermarket annuity compounds for a decade. With ~8,000 LEAP engines on wing (737 MAX and A320neo) and average time-to-first-shop-visit of 7-10 years, the shop-visit wave has barely started. High-margin spare-parts and MRO revenue will ramp through the 2030s with very low incremental investment. This is the most durable revenue stream in commercial aerospace.
FLIGHT DECK lean system drives structural margin expansion. CEO Culp imported Danaher's FLIGHT DECK operating discipline — SG&A/Revenue has already compressed from 19.7% (FY2022) to 8.9% (FY2025). Operating margins have expanded from 12.3% to 19.1% in three years and have room to reach 22-25%+ as services mix increases.
FCF generation far exceeds what the earnings statement shows. FY2025 FCF of $7.26B ($6.83/share) represents a 15.8% FCF margin. With buybacks shrinking the share count aggressively (down ~3% annually), FCF/share growth will substantially exceed revenue growth.
Defense DPT provides secular tailwind. F-35, B-52 re-engining (CFM56→F130), and classified programs represent multi-year, cost-plus-adjacent revenue visibility. Defense budgets globally are rising.
Premium multiple requires flawless execution. At 40.6x TTM P/E and 29.3x EV/EBITDA, GE is priced for a long and sustained period of services-driven margin expansion. Any unexpected shop-visit timing delay, LEAP durability issue, or commercial aviation demand softness could trigger a 20-35% de-rating without a fundamental earnings miss.
LEAP hot-section durability remains a watch item. Early-cycle LEAP engines have experienced higher-than-expected hot-section degradation rates in some operators. If shop-visit intervals shorten beyond plan, near-term MRO volume surges but unit economics may compress as operators push back on pricing.
China widebody exposure is a geopolitical risk. GE9X powers the Boeing 787 Dreamliner; China's COMAC C919 uses LEAP-1C engines under CFM. Any escalation in US-China trade restrictions, aircraft certification friction, or airline capacity decisions in China could affect GEV's most profitable international routes.
Supply chain constraints cap upside leverage. Engine production backlogs (737 MAX, A320neo) limit GE's ability to fully monetize demand surges. Casting, forgings, and skilled labor remain bottlenecks across the aerospace supply chain — execution risk is real.
At 40.6x TTM P/E and 29.3x EV/EBITDA, GE trades at a meaningful premium to industrial peers (RTX: ~23x, Safran: ~32x). A services-execution miss, aviation demand softness, or interest rate normalization that re-rates industrials could compress the multiple 20-30% even without an EPS miss. Consensus PTs at $365-375 imply only 10-13% upside from current levels — limited margin of safety at this price.
LEAP engine hot-section durability has surprised some operators, with higher-than-expected shop-visit rates in certain duty cycles. If shop intervals permanently shorten, near-term MRO revenue surges but longer-term economics become less favorable as airlines gain leverage in contract renewals. Conversely, if LEAP durability exceeds expectations, shop-visit ramp is delayed. The timing is GE's most important near-term unknown.
Commercial aviation is cyclical — recessions, pandemics, and fuel shocks all depress departure volumes and park aircraft, directly reducing shop-visit demand. GE's services revenue is highly correlated to flight hours. A return to pandemic-level capacity cuts (>30% flight reductions) would severely impair near-term FCF, though the installed base would remain intact for the eventual recovery.
GE's GE9X (787 Dreamliner) and CFM LEAP-1C (COMAC C919) have significant Chinese demand exposure. US-China trade friction, aircraft certification disputes, or Chinese airline capacity decisions pose country-concentration risk. LEAP-1C shipments to COMAC are subject to US export license requirements — escalating technology restrictions could affect a growing revenue stream.
GE's engine delivery volumes are gated by Boeing's and Airbus's production rates. Boeing's 737 MAX quality/certification issues and any future production pauses directly reduce LEAP new-engine deliveries. Broader aerospace supply chain constraints (castings, forgings, labor) limit GE's ability to fill its order backlog at the pace of demand — creating execution risk even in a strong demand environment.
Net debt of $8.1B is moderate (0.67x EBITDA) but GE continues to aggressively buy back stock ($7.55B in FY2025, exceeding FCF). The company is simultaneously investing $1.3B+ in CapEx for MRO capacity expansion. If FCF disappoints or aviation demand softens, the buyback pace may need to slow — removing a key EPS/share-count tailwind. Pension obligations also remain a balance sheet item worth monitoring.
Fwd P/E: 45x FY2027E $8.60 = ~$387 + buyback EPS lift. EV/EBITDA: 35x FY2027E $10.5B EBITDA = ~$418. LEAP shop-visit ramp accelerates; Q1 order momentum (+93%) proves services demand is deep. FLIGHT DECK drives operating margin to 21%+. Defense contract wins support DPT revenue. Buybacks shrink share count 3-4% annually, amplifying EPS growth. Multiple expands modestly as quality-of-earnings proves out.
Fwd P/E: 42x FY2027E $8.60 = ~$361. EV/EBITDA: 32x FY2027E $10.5B EBITDA = ~$372. Steady execution on services ramp, in-line margin expansion, no material disruption in commercial aviation. Multiple holds roughly flat as consensus PTs are achieved. Consistent with 1Y analyst avg PT of $374.50. Services annuity supports earnings resilience; modest multiple compression as growth matures.
Fwd P/E: 28x FY2027E $8.60 = ~$241 with earnings haircut. EV/EBITDA: 20x on materially lower EBITDA if aviation demand softens. Commercial aviation recession reduces shop-visit volume 15-20%. LEAP durability issue or China restriction materializes. Premium multiple de-rates sharply (from 40x toward industrial peer avg ~22-25x). Buyback pace slows as FCF falls. This scenario requires both a demand shock AND multiple compression — steep but possible in a macro downturn.
This report was generated using FMP financial data as of June 5, 2026. This is for informational purposes only and does not constitute investment advice. Past performance is not indicative of future results. GE Aerospace (NYSE: GE) is a pure-play aerospace company following the spinoffs of GE HealthCare (Jan 2023) and GE Vernova (Apr 2024) from the former General Electric conglomerate.