GE Stock: Soar to New Heights with Post-Breakup 

GE Stock

On April 2, 2024, marked a significant milestone in U.S. corporate history as General Electric (NYSE:GE) finalized its breakup, spinning out its power and renewable energy business, GE Vernova (NYSE:GEV), listed on the NYSE.

This followed the earlier spinoff of GE Healthcare (NASDAQ:GEHC) in January 2023. What remains is GE Aerospace (NYSE:GE), under the leadership of chairman and CEO Larry Culp, former Danaher (NYSE:DHR) chief, who orchestrated the transformation and debt reduction of GE.

Thriving Business at GE Aerospace

GE Aerospace stands as the world’s leading manufacturer of jet engines, boasting $32 billion in adjusted revenues. With approximately 44,000 commercial aircraft engines in operation, it powers nearly half of the global fleet.

Additionally, its defense and propulsion technologies arm supports around 26,000 engines, including those for General Dynamics’ (NYSE:GD) F-16 and Boeing’s (NYSE:BA) F-15 fighter jets, as well as Boeing’s Apache and Sikorsky’s Black Hawk helicopters.

Both segments of GE Aerospace’s business are thriving, driven by increased defense spending globally and rising demand for commercial aerospace. Airbus (OTCMKTS:EADSY) and Boeing are ramping up production to fulfill orders extending into the 2030s.

At an investor day in March, Culp expressed confidence in their position, stating, “We are at a point in time where demand isn’t our challenge.”

Buy Recommendation for GE Aerospace Stock

GE anticipates “low double-digit” revenue growth over the next two years, with operating profit expected to outpace this, reaching between $7.1 billion and $7.5 billion by 2025 and aiming for $10 billion by 2028.

Morningstar emphasizes GE Aerospace’s strong long-term prospects, citing its technical expertise, long product cycles, and customer loyalty. The company’s commitment to returning excess cash to shareholders through dividends and buybacks further strengthens its appeal.

With over two-thirds of its engines in the “sweet spot” for aftermarket servicing revenues and industry-leading operating margins nearing 20%, GE Aerospace presents a compelling investment opportunity.

In conclusion, GE Aerospace’s future appears bright, making it an attractive buy at its current price of $155 per share.

Featured Image: Megapixl

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