{ "@context": "https://frontierpicks.com/schemas/dossier.v1.json", "ticker": "GE", "name": "GE Aerospace", "url": "https://frontierpicks.com/dossiers/GE/", "json_url": "https://frontierpicks.com/dossiers/GE.json", "status": "WATCHLIST", "current_conviction": "LOW", "archetype": { "code": "a1", "n": 1 }, "current_thesis": "GE Aerospace shares are more likely to trail the S&P 500 than lead: record China orders lifted them, but services and LEAP delivery growth slowed in the third quarter. FAA approval of the GE9X mid-seal and 2027 guidance around 22 January 2027 settle the case.", "invalidation_trigger": "A daily close above $374.52, the highest adjusted close since mid-August (2026-08-18), would show the shares leading the S&P 500. 2027 guidance for commercial services growth above the low-double-digit pace would also prove this call wrong.", "catalyst_date": null, "portfolio": null, "pick": null, "themes": [ "defense-aerospace" ], "tags": [], "sources": [], "caveats": [], "source_links": [ { "title": "ajot.com", "url": "https://www.ajot.com/news/ge-aerospace-says-it-signs-record-12.9-billion-deals-at-china-expo", "date": "2026-11-06" }, { "title": "BNN Bloomberg", "url": "https://www.bnnbloomberg.ca/business/2026/09/08/ge-aerospace-to-buy-castings-maker-cpp-for-nearly-us12-billion/", "date": "2026-09-08" }, { "title": "air-journal.fr", "url": "https://www.air-journal.fr/2026-10-23-ge9x-la-faa-conditionne-la-certification-du-boeing-777-9-a-un-joint-redessine-5278435.html", "date": "2026-10-23" }, { "title": "GE Aerospace Lost 3% in a Month. Jefferies Still Sees 41% Upside", "url": "https://www.tikr.com/blog/ge-aerospace-lost-3-in-a-month-jefferies-still-sees-41-upside", "date": null }, { "title": "One Seal Inside the GE9X Is Holding Up the 777-9's ETOPS Testing, and Boeing Says the Campaign May Slip Into 2027", "url": "https://aerocorner.com/news/ge9x-mid-seal-777-9-etops-delay/", "date": null } ], "evidence": [ { "claim": "GE Aerospace signed more than $12.9 billion of sales and service agreements at the China International Import Expo, a record for the company at the show, led by 202 LEAP-1A engines for 101 China Eastern A320neo-family aircraft.", "source": "Reuters, via AJOT", "as_of": "2026-11-06" }, { "claim": "Q3 2026 orders were $19.0B (+49%), adjusted revenue $13.3B (+18%), adjusted EPS $2.25 (+36%) against a $2.00 estimate, and adjusted operating margin 22.5% (+220 basis points).", "source": "GE Aerospace Q3 2026 earnings release (Form 8-K)", "as_of": "2026-10-20" }, { "claim": "2026 guidance raised: adjusted EPS $8.00–$8.10 (from $7.65–$7.85), operating profit $10.9–$11.0B (from $10.55–$10.75B), free cash flow $9.1–$9.4B (from $8.9–$9.2B).", "source": "GE Aerospace Q3 2026 earnings release (Form 8-K)", "as_of": "2026-10-20" }, { "claim": "Q3 LEAP engine deliveries rose 5% (535 against 511 a year earlier), against 26% growth year to date; Q3 free cash flow fell 14% to $2.0B.", "source": "GE Aerospace Q3 2026 earnings release (Form 8-K)", "as_of": "2026-10-20" }, { "claim": "Management expects 2027 commercial services revenue to grow low-double-digits, supported by a commercial services backlog of more than $170B.", "source": "GE Aerospace Q3 2026 earnings release (Form 8-K)", "as_of": "2026-10-20" }, { "claim": "An FAA official said the agency will not certify the Boeing 777-9 until it approves the redesigned GE9X mid-seal; GE aims for approval by the end of 2026.", "source": "FlightGlobal, via Air Journal 2026-10-23", "as_of": "2026-10-22" }, { "claim": "GE Aerospace agreed to buy castings maker Consolidated Precision Products for $11.75B, funded with $7B of cash and new debt, closing expected in the second half of 2027; CPP expected to generate about $2B of 2027 revenue.", "source": "BNN Bloomberg, 2026-09-08", "as_of": "2026-09-08" }, { "claim": "Jefferies lowered its price target to $425 from $435 with a Buy rating; TIKR put the consensus analyst target at $378.", "source": "TIKR, 2026-11-03", "as_of": "2026-11-03" } ], "view_changes": [], "frame": null, "filed_numbers": { "as_of": "2026-11-13", "sector": "Technology", "financials": { "status": "ok", "reason": null, "close_date": "2026-11-13", "latest_quarter": "2026-09-30", "figures": { "revenue": { "status": "ok", "label": "total revenues, including investment gains and losses", "quarters": [ { "end": "2026-09-30", "filed": "2026-10-20", "restated": null, "value_musd": 14118, "yoy_pct": 15.9 }, { "end": "2026-06-30", "filed": "2026-07-16", "restated": null, "value_musd": 13349, "yoy_pct": 21.1 }, { "end": "2026-03-31", "filed": "2026-04-21", "restated": null, "value_musd": 12392, "yoy_pct": 24.7 }, { "end": "2025-12-31", "filed": "2026-01-29", "restated": null, "value_musd": 12717, "yoy_pct": 17.6 }, { "end": "2025-09-30", "filed": "2025-10-21", "restated": null, "value_musd": 12181, "yoy_pct": 23.8 }, { "end": "2025-06-30", "filed": "2025-07-21", "restated": null, "value_musd": 11023, "yoy_pct": 21.2 } ] }, "gross_margin": { "status": "not reported" }, "operating_margin": { "status": "ok", "quarters": [ { "end": "2026-09-30", "filed": "2026-10-20", "restated": null, "pct": 16.8 }, { "end": "2026-06-30", "filed": "2026-07-16", "restated": null, "pct": 18.6 }, { "end": "2026-03-31", "filed": "2026-04-21", "restated": null, "pct": 17.9 }, { "end": "2025-12-31", "filed": "2026-01-29", "restated": null, "pct": 17.7 }, { "end": "2025-09-30", "filed": "2025-10-21", "restated": null, "pct": 18.3 }, { "end": "2025-06-30", "filed": "2025-07-21", "restated": null, "pct": 19 } ] }, "pretax_income": { "status": "ok", "end": "2026-09-30", "filed": "2026-10-20", "value_musd": 2805 }, "net_income": { "status": "ok", "end": "2026-09-30", "filed": "2026-10-20", "four_quarters_end": "2026-09-30", "value_musd": 2288, "four_quarters_musd": 9103 }, "operating_cash_flow": { "status": "ok", "end": "2026-09-30", "filed": "2026-10-20", "first_end": "2025-12-31", "value_musd": 9451 }, "capital_spending": { "status": "ok", "end": "2026-09-30", "filed": "2026-10-20", "first_end": "2025-12-31", "value_musd": 1433 }, "free_cash_flow": { "status": "not meaningful", "reason": "a bank's or insurer's operating cash flow moves with its deposits, loans and policy reserves, so it is not cash free for its owners" }, "diluted_share_change": { "status": "ok", "end": "2026-09-30", "filed": "2026-10-20", "base_end": "2025-09-30", "pct": -2.3 }, "cash": { "status": "ok", "end": "2026-09-30", "filed": "2026-10-20", "value_musd": 8764 }, "debt": { "status": "ok", "end": "2026-09-30", "filed": "2026-10-20", "value_musd": 19326 }, "net_cash": { "status": "not meaningful", "reason": "a bank's or insurer's cash and investments back its deposits and policies" }, "deferred_revenue": { "status": "ok", "end": "2026-09-30", "filed": "2026-10-20", "value_musd": 11318, "yoy_pct": 3.5 }, "backlog": { "status": "ok", "end": "2026-09-30", "filed": "2026-10-20", "value_musd": 212084, "yoy_pct": 20.3 }, "receivables": { "status": "ok", "end": "2026-09-30", "filed": "2026-10-20", "value_musd": 14019 }, "inventory": { "status": "ok", "end": "2026-09-30", "filed": "2026-10-20", "value_musd": 12743 }, "equity": { "status": "ok", "end": "2026-09-30", "filed": "2026-10-20", "value_musd": 17522 }, "market_value": { "status": "ok", "close_date": "2026-11-13", "basis_end": "2026-09-30", "basis_filed": "2026-10-20", "value_musd": 342876.5 }, "enterprise_value": { "status": "not meaningful", "reason": "a bank's or insurer's cash and investments back its deposits and policies" }, "ev_sales": { "status": "not meaningful", "reason": "a bank's or insurer's cash and investments back its deposits and policies" }, "ev_ebit": { "status": "not meaningful", "reason": "a bank's or insurer's cash and investments back its deposits and policies" }, "pe": { "status": "ok", "close_date": "2026-11-13", "basis_end": "2026-09-30", "basis_filed": "2026-10-20", "multiple": 37.7 }, "pb": { "status": "ok", "close_date": "2026-11-13", "basis_end": "2026-09-30", "basis_filed": "2026-10-20", "multiple": 19.6 }, "fcf_yield": { "status": "not meaningful", "reason": "a bank's or insurer's operating cash flow moves with its deposits, loans and policy reserves, so it is not cash free for its owners" } }, "financial_balance_sheet": { "kind": "insurer" } }, "short_interest": { "status": "ok", "settlement": "2026-10-15", "published": "2026-10-26", "short_pct_of_outstanding": 1.11, "days_to_cover": 2.9, "change_pct": 0.3 }, "insiders": { "status": "ok", "as_of": "2026-11-15", "windows": [ { "days": 90, "status": "ok", "from": "2026-08-18", "bought_usd": 0, "sold_usd": 7619032.8, "bought_unpriced": 0, "sold_unpriced": 0 }, { "days": 365, "status": "ok", "from": "2025-11-16", "bought_usd": 0, "sold_usd": 28884605.73, "bought_unpriced": 0, "sold_unpriced": 0 } ] } }, "body_markdown": "## Current Thesis\n\nGE Aerospace shares look somewhat more likely to trail the S&P 500 than beat it over the next three months. Orders are strong, but growth in services revenue and LEAP engine deliveries slowed in the third quarter, and management has guided services growth slower again for 2027. Two events settle the case. The first is Federal Aviation Administration (FAA) approval of the redesigned GE9X mid-seal, which the company targets by the end of 2026. The second is formal 2027 guidance at the fourth-quarter report, expected around 2027-01-22.\n\nThe shares closed at $342.75 on 2026-11-11, up from $314.73 on 2026-11-05. The rise followed the company's 2026-11-06 announcement of more than $12.9 billion of sales and service agreements at the China International Import Expo, a record for GE at that show (Reuters, via AJOT). The price already reflects the raised 2026 guidance and the China orders: the close sits 4.8% below its level three months earlier and under the $378 consensus target TIKR reported on 2026-11-03. What it leaves open is whether services and deliveries pick up again in 2027.\n\nThe rating is Low because neither settling event has happened. The rally from 2026-11-05 to 2026-11-11 came from order news. It added no data on services growth or delivery pace.\n\n## Bull Case\n\n- **A record order haul in China.** China Eastern Airlines agreed to 202 LEAP-1A engines for 101 newly ordered Airbus A320neo-family aircraft, plus spares and long-term service. A separate deal covers 14 spare LEAP-1A, LEAP-1C and CFM56-7B engines (Reuters, 2026-11-06).\n- **Guidance rose across the board.** On 2026-10-20 the company raised 2026 adjusted earnings per share (EPS) guidance to $8.00–$8.10 from $7.65–$7.85. It raised free cash flow guidance to $9.1–$9.4 billion from $8.9–$9.2 billion (Form 8-K).\n- **The third quarter beat estimates.** Orders rose 49% to $19.0 billion and adjusted EPS rose 36% to $2.25, against a $2.00 estimate. Adjusted operating margin rose 2.2 percentage points to 22.5% (2026-10-20 release).\n- **A large services backlog.** The company cited a commercial services backlog of more than $170 billion on 2026-10-20. It expects 2027 commercial services revenue to grow at a low-double-digit rate.\n- **Older engines are flying longer.** On 2026-09-17 the chief financial officer said 2026 CFM56 retirements should be 1.5%–2%, against the 3%–4% first assumed (TIKR). More engines in service means more overhaul and parts revenue.\n- **A castings deal targets the supply bottleneck.** On 2026-09-08 GE agreed to buy Consolidated Precision Products (CPP), a supplier of castings for LEAP and GEnx engines, for $11.75 billion. GE expects CPP to generate about $2 billion of revenue in 2027 (BNN Bloomberg).\n- **Most targets sit above the price.** Jefferies cut its target to $425 from $435 with a Buy rating (TIKR, 2026-11-03). UBS's target is $380, and JPMorgan's and RBC's are $375 (Benzinga, 2026-10-21).\n\n## Bear Case\n\n- **Services growth is slowing.** Commercial services revenue grew 17% in the third quarter, against roughly 32% in the first half (Top1Markets, 2026-10-20). The low-double-digit pace guided for 2027 is slower again.\n- **LEAP deliveries barely grew.** Third-quarter LEAP deliveries were 535, up 5% from 511 a year earlier, against 26% growth year to date (2026-10-20 release). Orders such as China Eastern's add to the backlog, not to near-term output.\n- **Cash flow dipped.** Third-quarter free cash flow fell 14% to $2.0 billion (2026-10-20 release). The CPP purchase will use $7 billion of cash, with the rest funded by new debt, and is not expected to close until the second half of 2027 (BNN Bloomberg, 2026-09-08).\n- **The GE9X seal still lacks FAA approval.** An FAA official said the agency will not certify the Boeing 777-9 until it approves the redesigned mid-seal (FlightGlobal, via Air Journal, 2026-10-23). Boeing has said 777-9 extended-range flight testing may slip into 2027 (AeroCorner). No approval had been reported as of 2026-11-12.\n- **Insiders are selling into the rally.** Vice President Robert Giglietti exercised options on 14,796 shares and sold them at an average $332.54 on 2026-11-04 (SEC Form 4, filed 2026-11-05). Fiscal.ai reported on 2026-11-10 that Chief Executive Larry Culp has adopted a plan to sell up to $95 million of shares.\n- **A bearish target remains.** BNP Paribas kept an Underperform rating and cut its target to $280 on 2026-10-21 (Benzinga).\n\n## Setup & Price Structure\n\nThe shares closed at $342.75 on 2026-11-11. That is above both the 50-day moving average of $314.57 and the 200-day moving average of $322.83, as of the same close. Five sessions earlier they closed at $314.73 on 2026-11-05, just above the 50-day average, before rising on four straight sessions: $323.24, $335.54, $337.91 and $342.75.\n\nThe upper reference is the 52-week intraday high of $388.84 on 2026-08-06; the 2026-11-11 close is 11.9% below it. The shares closed at $360.64 on 2026-08-13 and are down 4.8% over three months. The 52-week closing low is $273.25, set on 2026-03-30. A move back to the August high would need new evidence that services or deliveries are picking up again. The order news alone does not supply it.\n\n## Catalyst Calendar\n\n- **~2026-12-15 (est.):** FAA certification of the redesigned GE9X mid-seal. Releases GE9X profit the company has deferred and clears an FAA condition for 777-9 certification; a slip into 2027 would weaken the case.\n- **~2027-01-22 (est.):** Fourth-quarter 2026 report and formal 2027 guidance. Shows whether 2027 commercial services growth holds at or beats the low-double-digit pace guided, whether LEAP deliveries reaccelerate, and whether 2026 free cash flow lands in the $9.1–$9.4B range.\n\n## What Would Change Our Mind\n\nA daily close above $374.52, the highest adjusted close since mid-August (2026-08-18), would show the shares leading the S&P 500. 2027 guidance for commercial services growth above the low-double-digit pace would also prove this call wrong.\n\n## Correlation Notes\n\nThe LEAP engine is built by CFM International, a 50/50 joint venture with Safran, so LEAP orders and delivery news move both companies. The GE9X issue ties the shares to Boeing's 777X schedule. LEAP-1A demand tracks Airbus A320neo-family output, and the China Eastern order links the shares to Chinese airline fleet plans. The CPP deal makes GE a castings competitor of Howmet Aerospace, whose shares fell about 8% on 2026-09-08, the day the deal was announced (BNN Bloomberg). The defense business, including talks with India over F414-INS6 engine production (Fiscal.ai, 2026-11-02), connects the shares to defense stocks, which rebounded in October 2026 (Benzinga, 2026-10-31).", "first_seen": "2026-11-10", "last_analyzed": "2026-11-12T04:14:18+00:00", "last_synthesized": "2026-11-12", "date_modified": "2026-11-12", "license": "Content © FrontierPicks. Cite the canonical URL." }