Up 55% YTD, Is GE Aerospace Stock a Buy Before July 17?
In the first quarter of 2025, GE Aerospace delivered strong results, highlighted by substantial growth in both revenue and earnings per share (EPS). Orders saw a notable 12% increase, driven primarily by commercial services, while revenue rose by 11%. GE reported a profit of $2.1 billion, reflecting a significant 38% increase from the previous year, driven by increased service volume, a favorable product mix, and pricing strategies.
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Moreover, margins expanded by 460 basis points to 23.8%. EPS surged to $1.49, up 60% year-over-year, bolstered by profit growth and reduced share count resulting from buyback initiatives.
Looking ahead, GE Aerospace maintains a robust commercial backlog of about $140 billion, providing a solid foundation for future growth. As the company will soon announce second-quarter results, let's look at analysts' expectations for Q2.
GE Aerospace is witnessing strong demand, with its second quarter shaping up to build on the momentum seen earlier this year. In the first quarter, the company outperformed expectations, thanks mainly to higher spare parts volume and a favorable services mix. That trend will likely continue, laying the foundation for another impressive performance.
One of the key growth catalysts for GE Aerospace is its Commercial Engines & Services (CES) segment. CES is currently leveraging its large installed base of commercial aircraft engines, which is translating into solid financials. Orders in the segment surged 31% year-over-year in Q1, while revenue climbed 17%. This impressive growth translated to a 35% increase in total operating profit, reflecting the strength and scale of the company's aftermarket services.
Recent significant commitments from top global carriers will likely further drive CES's performance. Its considerable wins on the commercial front included a significant engine commitment from Japan's All Nippon Airways (ANA). ANA also opted for the company's GEnx engines, solidifying its long-term partnership with GE Aerospace.
Further bolstering its order book, GE Aerospace received a commitment from Malaysia Aviation Group for 60 LEAP engines for their upcoming Boeing 737 MAX aircraft. And in the widebody segment, Korean Air placed an order for up to 30 Boeing 787-10s and 20 777-9s, all to be powered by GE's GEnx and GE9X engines. These deals reflect GE's strong market position and the continued demand for its advanced engine technologies.
On the defense side, the company's Defense & Propulsion Technologies (DPT) unit is also firing on all cylinders. DPT is focused on advancing key military programs and delivering cutting-edge propulsion technologies. In Q1, defense revenue rose 5%, while profit surged 16%. Strong demand continues to drive this segment, evidenced by a book-to-bill ratio of 1.4x. Among the notable developments, GE Aerospace secured a significant contract from the U.S. Air Force for its F110 engines — an agreement worth up to $5 billion.
Looking ahead, analysts remain optimistic about the company's earnings potential. GE Aerospace is expected to post earnings of $1.43 per share for the second quarter, representing a 19.2% increase over the $1.20 reported in the same period last year.
GE has also built a strong track record of outperforming expectations, beating analysts' earnings estimates for four consecutive quarters. In Q1, it delivered an 18.3% earnings surprise.
As the company heads into its second-quarter earnings report, analysts are feeling confident on GE stock. With a solid combination of commercial engine demand, robust defense contracts, and a proven ability to beat earnings forecasts, GE Aerospace is well-positioned for a strong second quarter.
Analysts are optimistic about GE Aerospace stock ahead of earnings and maintain a 'Strong Buy' consensus rating. This implies the rally may not be over just yet.
On the date of publication, Amit Singh did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com
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