GE · GE Aerospace
Conviction · Low · more likely to lag the S&P 500 over the next three months
Wrong if: a daily close above $374.52
Note written ·
Price against the kill line
11.4% clear of its kill line on the 13 November 2026 close.
How to read this
This note expects the shares to lag the market, so its kill line sits above the price: a close above the red mark would prove the view wrong. Prices run from low on the left to high on the right. The dot is where the stock closed on 13 November 2026, left of the mark while it is below the line; a dot right of the mark has closed through it.
The scale is stretched near the line, so close calls are easy to see. More than 8% from the line, the stock reads well clear, with a hollow dot to show the figure is off the drawn scale.
The kill line is the research note's own test. The portfolio sells on business facts, not on a price. How the portfolio decides
Three months against the kill line
Daily closes, to . Red: the kill line, a daily close above $374.52, on record since 11 November 2026. The shares are down 10.0% since the close; the S&P 500 is down 2.1% over the same sessions. Figures in the note can cover a different window.
Kill line
A daily close above $374.52, the highest adjusted close since mid-August (18 August 2026), would show the shares leading the S&P 500. 2027 guidance for commercial services growth above the low-double-digit pace would also prove this call wrong.
Research onlyNot in the portfolio.
Key figures from the filings · Technology
Quarter to 30 September 2026, filed 20 October 2026; valuation at the 13 November 2026 close
- Net income, latest quarter ($M)
- 2,288
- Net income, four quarters ($M)
- 9,103
- Shareholders' equity ($M)
- 17,522
- Price to earnings (×)
- 37.7
- Price to book value (×)
- 19.6
- Revenue, latest quarter ($M)total revenues, including investment gains and losses
- 14,118
- Revenue, change on a year (%)
- +15.9
- Market value ($M)
- 342,877
GE Aerospace is an insurer: net cash, enterprise value and free cash flow are not shown, because a bank's or insurer's cash and investments back its deposits and policies.
All filed numbers
What GE Aerospace reports to the SEC in its quarterly and annual filings. Each group states its period and filing date once; a figure dated otherwise says so. Built from the filings known on .
| Quarter to | Revenue ($M) | On a year (%) | Operating margin (%) |
|---|---|---|---|
| first filed | 14,118 | +15.9 | 16.8 |
| first filed | 13,349 | +21.1 | 18.6 |
| first filed | 12,392 | +24.7 | 17.9 |
| first filed | 12,717 | +17.6 | 17.7 |
| first filed | 12,181 | +23.8 | 18.3 |
| first filed | 11,023 | +21.2 | 19.0 |
| Pre-tax income ($M) | 2,805 |
| Net income ($M) four quarters: 9,103 | 2,288 |
| Diluted shares, change on a year (%) against the quarter to 30 September 2025 | −2.3 |
| Operating cash flow ($M) | 9,451 |
| Capital spending ($M) | 1,433 |
| Free cash flow ($M) | Not meaningful |
Not meaningful: 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.
| Cash and short-term investments ($M) | 8,764 |
| Debt ($M) | 19,326 |
| Net cash, cash less debt ($M) | Not meaningful |
| Deferred revenue ($M) +3.5% on a year | 11,318 |
| Backlog, orders not yet delivered ($M) +20.3% on a year | 212,084 |
| Receivables ($M) | 14,019 |
| Inventory ($M) | 12,743 |
| Shareholders' equity ($M) | 17,522 |
Not meaningful: a bank's or insurer's cash and investments back its deposits and policies.
| Market value ($M) | 342,877 |
| Enterprise value, market value plus net debt ($M) | Not meaningful |
| Enterprise value to sales (×) | Not meaningful |
| Enterprise value to operating income (×) | Not meaningful |
| Price to earnings (×) | 37.7 |
| Price to book value (×) | 19.6 |
| Free-cash-flow yield (%) | Not meaningful |
Not meaningful: a bank's or insurer's cash and investments back its deposits and policies.
Not meaningful: 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.
Short interest (FINRA, settled 15 October 2026, published 26 October 2026): 1.1% of shares outstanding sold short, 2.9 days of average trading to cover, +0.3% since the previous report.
| Window | Bought | Sold |
|---|---|---|
| 90 daysfrom | $0 | $7.6M |
| 12 monthsfrom | $0 | $28.9M |
The thesis
GE 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 22 January 2027.
The shares closed at $342.75 on 11 November 2026, up from $314.73 on 5 November 2026. The rise followed the company's 6 November 2026 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 3 November 2026. What it leaves open is whether services and deliveries pick up again in 2027.
The rating is Low because neither settling event has happened. The rally from 5 November to 11 November 2026 came from order news. It added no data on services growth or delivery pace.
Bullish and bearish views on GE Aerospace
The bull case on GE Aerospace (GE), in brief: a record order haul in China. The bear case: services growth is slowing.
Bull case
- 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, 6 November 2026).
- Guidance rose across the board. On 20 October 2026 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).
- 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% (20 October 2026 release).
- A large services backlog. The company cited a commercial services backlog of more than $170 billion on 20 October 2026. It expects 2027 commercial services revenue to grow at a low-double-digit rate.
- Older engines are flying longer. On 17 September 2026 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.
- A castings deal targets the supply bottleneck. On 8 September 2026 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).
- Most targets sit above the price. Jefferies cut its target to $425 from $435 with a Buy rating (TIKR, 3 November 2026). UBS's target is $380, and JPMorgan's and RBC's are $375 (Benzinga, 21 October 2026).
Bear case
- Services growth is slowing. Commercial services revenue grew 17% in the third quarter, against roughly 32% in the first half (Top1Markets, 20 October 2026). The low-double-digit pace guided for 2027 is slower again.
- LEAP deliveries barely grew. Third-quarter LEAP deliveries were 535, up 5% from 511 a year earlier, against 26% growth year to date (20 October 2026 release). Orders such as China Eastern's add to the backlog, not to near-term output.
- Cash flow dipped. Third-quarter free cash flow fell 14% to $2.0 billion (20 October 2026 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, 8 September 2026).
- 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, 23 October 2026). Boeing has said 777-9 extended-range flight testing may slip into 2027 (AeroCorner). No approval had been reported as of 12 November 2026.
- 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 4 November 2026 (SEC Form 4, filed 5 November 2026). Fiscal.ai reported on 10 November 2026 that Chief Executive Larry Culp has adopted a plan to sell up to $95 million of shares.
- A bearish target remains. BNP Paribas kept an Underperform rating and cut its target to $280 on 21 October 2026 (Benzinga).
Price setup
The shares closed at $342.75 on 11 November 2026. 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 5 November 2026, just above the 50-day average, before rising on four straight sessions: $323.24, $335.54, $337.91 and $342.75.
The upper reference is the 52-week intraday high of $388.84 on 6 August 2026; the 11 November 2026 close is 11.9% below it. The shares closed at $360.64 on 13 August 2026 and are down 4.8% over three months. The 52-week closing low is $273.25, set on 30 March 2026. 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.
Catalysts ahead
- ~15 December 2026 (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.
- ~22 January 2027 (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.
What would change the view
A daily close above $374.52, the highest adjusted close since mid-August (18 August 2026), 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.
What it trades with
The 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 8 September 2026, the day the deal was announced (BNN Bloomberg). The defense business, including talks with India over F414-INS6 engine production (Fiscal.ai, 2 November 2026), connects the shares to defense stocks, which rebounded in October 2026 (Benzinga, 31 October 2026).
The evidence, claim by claim (8)
- 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. Reuters, via AJOT · as of
- 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). GE Aerospace Q3 2026 earnings release (Form 8-K) · as of
- 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). GE Aerospace Q3 2026 earnings release (Form 8-K) · as of
- 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. GE Aerospace Q3 2026 earnings release (Form 8-K) · as of
- Management expects 2027 commercial services revenue to grow low-double-digits, supported by a commercial services backlog of more than $170B. GE Aerospace Q3 2026 earnings release (Form 8-K) · as of
- 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. FlightGlobal, via Air Journal 23 October 2026 · as of
- 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. BNN Bloomberg, 8 September 2026 · as of
- Jefferies lowered its price target to $425 from $435 with a Buy rating; TIKR put the consensus analyst target at $378. TIKR, 3 November 2026 · as of
Sources
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