Boasting a market cap of $184.5 billion, Ohio-based GE Aerospace (GE) leads the global aerospace industry in designing, manufacturing, and servicing large aircraft engines. Collaborating with Safran in their CFM joint venture, it maintains a substantial installed base of nearly 70,000 commercial and military engines worldwide.
Shares of this jet engine maker have significantly outperformed the broader market over the past 52 weeks. GE has gained 102.9% over this time frame, while the broader S&P 500 Index ($SPX) has rallied 25.2%. In 2024 alone, shares of GE are up 63.3%, easily overshadowing SPX's 10.4% gains on a YTD basis.
Zooming in further, GE is also outpacing the Aerospace & Defense Invesco ETF's (PPA) 31.9% gains over the past 52 weeks.
GE's outperformance is 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 soared 8.3% on April 23 after its Q1 earnings results exceeded Wall Street expectations. The company’s strong Q1 performance was driven by double-digit growth in commercial engines and services, robust demand in commercial aviation, and substantial order growth.
For the current fiscal year, ending in December, analysts expect GE's EPS to grow by 41.6% to $3.98. The company's earnings surprise history is promising. It beat the consensus estimates in each of the last four quarters.
Among the 15 analysts covering the stock, the consensus rating is a “Strong Buy.” That’s based on 13 “Strong Buy” ratings, one “Moderate Buy,” and one “Hold.”
This configuration is more bullish than three months before, with 10 analysts suggesting a "Strong Buy."
On May 23, UBS Group (UBS) raised GE Aerospace's price target to $201 and maintained a "Buy" rating, citing its robust industry position and expected earnings growth from the aerospace aftermarket. This new target suggests a potential upside of about 19.3% from the current price levels.
The mean price target of $184.23 represents a premium of just 9.3% to GE's current levels. The Street-high price target of $211, adjusted by Goldman Sachs in April, implies that the stock could rally as much as 25.2%.
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.
