GE Aerospace: Analysts Say New Highs Are Coming

Key Points

• GE Aerospace produced industry-leading growth in Q1 and reaffirmed guidance for the year. 
• The cash flow and capital return are safe and reliable; capital return is expected to grow. 
• Analysts are raising price targets, which could lead GE stock to new highs this year. 

GE Aerospace NYSE: GE, the newly streamlined version of the former General Electric, is emerging as a compelling turnaround story in 2025. Now unencumbered by its former conglomerate structure, the company is free to focus on its core strength: building airplane engines and servicing the aerospace industry. Based on analyst and industry trends, the 2025 H1 price pullback is a buying opportunity for investors, as this stock is expected to hit new highs soon. 

Analysts' trends include steady coverage, sentiment firming to a Buy from a Hold, and a rising price target that forecasts a 15% upside from critical support targets. The consensus in late April aligns with the early 2025 all-time highs but is a minimum target due to the trends, which suggest a move into the high-end range is likely.

The critical detail is that the Q1 results and guidance are unlikely to alter the trends, so estimates may continue to rise. 

GE Aerospace Leads Industry for Growth in Q1

GE Aerospace had a solid Q1, leading its industry with 11% of top-line growth. The $9 billion in revenue is light compared to MarketBeat’s reported consensus, but the miss is slim and offset by robust growth, profits, and the guidance. Aerospace companies like Lockheed Martin NYSE: LMT and RTX NYSE: RTX grew in Q1, but at slower rates. Segmentally, Commercial Engines & Services led with strength centered in the Services portion of the segment.

The Defense segment was flat compared to last year but is forecasted to grow in the coming quarters and the longer term. Among the catalysts for this segment is President Trump's pledge to boost U.S. defense spending by 12% to record levels in fiscal 2026. 

Margin news is also good. The company widened its profit and operating profit margins, with the operating margin up 460 basis points. The net result is $1.49 in adjusted earnings, nearly a quarter higher than analysts' forecasts, and a 60% increase over the prior year. Margin strength is expected to persist due to ongoing efforts to mitigate the impacts of tariffs and improve supply chain metrics. 

GE Aerospace guidance is good. The company issued guidance far better than whisper figures estimated, reaffirming its prior forecast for low double-digit revenue growth and roughly $5.27 in adjusted EPS. Longer-term forecasts project this company to grow revenue at a low teens pace and earnings at a high teens pace through the end of this decade. 

GE Aerospace’s Capital Return Will Grow in 2025

GE Aerospace’s capital return is attractive and expected to grow in 2025. The return includes a dividend and share repurchases, which reduced the count by 1.9% year-over-year in Q1. The dividend is less substantial, yielding only 0.8% in late April, but it is very safe. The payout ratio is about 25% of the 2025 EPS outlook, and the balance sheet is healthy. Highlights at the end of Q1 include steady assets, liabilities, and equity, as well as low leverage with long-term debt less than 1x equity.  

Institutional activity affected the price weakness and volatility in Q1 and H1. The institutions own a significant 75% of the stock, and net activity ramped to a multi-year high in Q1, with buying and selling roughly even. However, the balance of activity has shifted in favor of bulls in Q2, providing a tailwind for the market at price levels that align with strong support targets. 

GE Aerospace Enters Trading Range

GE Aerospace's price action is bullish following the Q1 release and guidance update. The market shows support at a critical level, aligning with an uptrend, but there is risk. Significant resistance at the all-time highs may cap gains this year. GE stock will trend sideways in this scenario and may not move outside the range until global macroeconomic headwinds ease.