Last Update 03 Feb 26

Fair value Increased 5.17%

GE: Aerospace Order Wins And Buybacks Will Support Stronger Future Profits

Analysts have lifted their implied fair value estimate for General Electric shares from US$339.69 to US$357.24. This reflects updated assumptions around slightly higher revenue growth, a modestly lower discount rate, and recent price target moves across the Street for GE Aerospace.

Analyst Commentary

Recent Street research has focused on recalibrating price targets for GE Aerospace, with both upward and downward adjustments feeding into the updated implied fair value estimate. The mix of views centers on how well GE can execute on aerospace demand and how much of that potential is already reflected in the share price.

Bullish Takeaways

Bullish analysts raising price targets by US$2 to US$30 point to a stronger long term earnings outlook for GE Aerospace, which they see as supportive of higher valuation multiples compared with prior assumptions.
The cluster of upward target revisions suggests confidence that GE can convert its aerospace order book into steady revenue and cash flow, which feeds directly into higher discounted cash flow estimates.
The updated targets reference sector momentum through at least the first half of 2026, which bullish analysts treat as a positive backdrop for GE to meet or beat current execution plans.
Incremental target moves, including the US$10 lift at JPMorgan, indicate that some major houses see room for upside if GE continues to deliver on operational milestones and capital allocation priorities.

Bearish Takeaways

The cut in one price target to US$378 from US$386 highlights that not all analysts are aligned, with some seeing prior expectations as too optimistic relative to execution risk and current valuation.
Bearish analysts point to the need for continued flawless delivery across programs, suggesting that any slip in aerospace production, cost control, or customer timing could pressure the current implied fair value.
The mix of raised and lowered targets indicates that, while the broader sector is viewed constructively into 2026, GE's ability to outperform peers is not universally assumed, which may cap how far valuation multiples move.
Some cautious views reflect concern that a significant portion of the aerospace growth narrative is already priced in, so upside from here could depend on GE exceeding, rather than just meeting, existing Street expectations.

What's in the News

Completed share repurchases of 58,406,000 shares, about 5.43% of outstanding, for US$12,252.67m under the buyback announced on March 7, 2024, including 6,404,000 shares repurchased between October 1 and December 31, 2025 for US$2,006.31m (Key Developments).
Delta Air Lines selected GEnx engines to power 30 new Boeing 787-10 aircraft, with options for 30 more, along with spare engines and long term services support, adding to a GEnx installed base that has accumulated more than 70m flight hours since 2011 and powers roughly two thirds of all 787s in operation (Key Developments).
Saudia Group agreed to equip 39 Boeing 787-9 and 787-10 aircraft with GEnx-1B engines, including a multi year MRO program, spare engines, and capability building initiatives through Saudia Technic to expand and localize aerospace expertise in Saudi Arabia (Key Developments).
Emirates ordered 130 GE9X engines to power 65 additional Boeing 777-9 aircraft, lifting its total GE9X order book to more than 540 engines, combined with spare engines and a long term services agreement, reinforcing a 40 year relationship and GE Aerospace's presence in the UAE (Key Developments).
flydubai ordered 60 GEnx-1B engines for its first widebody fleet of 30 Boeing 787-9 aircraft, including spare engines and a long term services agreement to support expansion into long haul routes, with GE Aerospace highlighting the GEnx family's more than 70m flight hours and current installed and backlog total of more than 3,900 engines (Key Developments).
GE Aerospace and Shield AI agreed to collaborate on propulsion technologies for Shield AI's new X BAT VTOL fighter jet, selecting the F110 GE 129 engine with Axisymmetric Vectoring Exhaust Nozzle, with GE Aerospace providing propulsion and testing support for future unmanned applications (Key Developments).

Valuation Changes

The fair value estimate has risen modestly from US$339.69 to US$357.24 per share, reflecting updated inputs in the model.
The discount rate has moved slightly lower from 7.66% to 7.62%, indicating a small adjustment to the required return used in the analysis.
The revenue growth assumption has been raised from 7.10% to 7.68%, pointing to a somewhat stronger top line outlook in the updated framework.
The net profit margin assumption has eased from 19.11% to 18.30%, suggesting a more conservative view on future profitability levels.
The future P/E multiple has edged up from 41.10x to 41.56x, indicating a minor change in the valuation multiple applied to projected earnings.

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Key Takeaways

Advanced engine programs and digitalization are driving strong long-term revenue and margin growth through efficiency, sustainability, and increased aftermarket demand.
International defense spending and supply chain improvements are fueling higher output, supporting robust cash flow and operational leverage.
Heavy dependence on commercial aviation and reduced diversification expose GE to elevated risk from industry cycles, supply chain pressures, execution challenges, and intensifying global competition.

Catalysts

About General Electric

General Electric Company, doing business as GE Aerospace, designs and produces commercial and defense aircraft engines, integrated engine components, electric power, and mechanical aircraft systems.What are the underlying business or industry changes driving this perspective?

Acceleration of next-generation engine programs (like CFM RISE with open fan technology and the GE9X) driven by airline demand for significantly improved fuel efficiency and lower emissions; positions GE to capture incremental orders and technology licensing revenue as decarbonization efforts intensify, positively impacting long-term revenue and earnings growth.
Digitalization and AI integration across MRO and inspection processes (such as AI-enabled Blade Inspection Tools and enhanced digital twins) are increasing operational efficiency, reducing turn times by up to 50%, and enabling predictive maintenance-supporting higher aftermarket services revenue and margin expansion.
Expansion and maturation of the installed base (LEAP engine base tripling, GEnx doubling by 2030), combined with fleet aging and delayed retirements, is fueling a sustained wave of shop visit activity and parts demand, directly contributing to robust and recurring services revenue and higher net margins through the decade.
Growing international defense spending and increased localization requirements are accelerating demand for advanced propulsion technologies and upgrades (e.g., XA100/102, GCAP participation via Avio Aero), providing support for solid defense revenue growth and margin improvements as global tensions persist.
Major supply chain stabilization and productivity gains from the FLIGHT DECK operating model and $2B+ investment in capacity are unlocking pent-up services demand and enabling double-digit output growth, translating into sustained higher free cash flow conversion and improved operating leverage.

General Electric Earnings and Revenue Growth

General Electric Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming General Electric's revenue will grow by 6.9% annually over the next 3 years.
Analysts assume that profit margins will increase from 18.2% today to 18.8% in 3 years time.
Analysts expect earnings to reach $9.5 billion (and earnings per share of $9.11) by about September 2028, up from $7.6 billion today. The analysts are largely in agreement about this estimate.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 38.9x on those 2028 earnings, up from 38.6x today. This future PE is greater than the current PE for the GB Aerospace & Defense industry at 34.4x.
Analysts expect the number of shares outstanding to decline by 2.02% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 7.75%, as per the Simply Wall St company report.

General Electric Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Heavy reliance on the commercial aviation sector and narrow-body engine programs (notably the LEAP and CFM56 families) exposes GE Aerospace to significant risk if there is a long-term slowdown in global air travel demand-whether from persistent economic stagnation, higher carbon taxes, or a shift toward sustainability policies limiting air travel-which could depress commercial services and equipment revenue, impacting overall profitability.
GE's ongoing transition to a more focused, pure-play aerospace company following recent divestitures results in a less diversified revenue base; this structural change increases earnings volatility and reduces GE's ability to offset cyclical downturns in aviation, potentially leading to larger swings in revenue and net margins.
Persistent supply chain tightness and continued material/labor inflation across GE's supplier network are expected to remain through the end of the decade; if inflation outpaces GE's pricing power or productivity improvements, this could erode operating profit margins and constrain free cash flow.
GE Aerospace faces substantial execution risk and heavy initial losses in ramping up production of new platforms (such as the GE9X); delays, cost overruns, or failure to realize planned cost reductions could result in persistent negative margins in the original equipment (OE) segment and weak overall earnings growth through at least the late 2020s.
Intensifying global competition from established engine manufacturers and new entrants-particularly in next-generation propulsion technologies, electrification, and digital offerings-could threaten GE's market share and pricing power, putting future revenue streams and service profit margins at risk if GE fails to maintain technological leadership or if customer adoption of alternative technologies accelerates.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $297.933 for General Electric based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $343.0, and the most bearish reporting a price target of just $266.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $50.8 billion, earnings will come to $9.5 billion, and it would be trading on a PE ratio of 38.9x, assuming you use a discount rate of 7.7%.
Given the current share price of $276.24, the analyst price target of $297.93 is 7.3% higher. The relatively low difference between the current share price and the analyst consensus price target indicates that they believe on average, the company is fairly priced.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

Analysts Boost General Electric Valuation on Strong Aerospace Outlook Despite Market Challenges