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Business Insider
17-07-2025
- Business
- Business Insider
GE Aerospace (GE) Is About to Report Q2 Earnings. Here's What to Expect
GE Aerospace (GE) is scheduled to announce its results for the second quarter of 2025 on Thursday, July 17. GE stock has rallied about 59% year-to-date, as the maker of defense and commercial aircraft engines is experiencing solid demand amid geopolitical tensions and a resilient travel market. Furthermore, the U.S. government recently granted GE Aerospace approval to restart exports of jet engines to China. Wall Street expects GE Aerospace to report earnings per share of $1.43, reflecting a year-over-year growth of 19.2%. Elevate Your Investing Strategy: Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence. Make smarter investment decisions with TipRanks' Smart Investor Picks, delivered to your inbox every week. Revenue is estimated to come in at $9.59 billion. GE Aerospace's Q2 performance is expected to gain from robust commercial engine demand, impressive defense contracts, and strong aftermarket services business. The company delivered market-beating results for the first quarter of 2025. As reflected in Main Street Data's chart below, GE Aerospace's Q1 2025 orders increased by 11.8% year-over-year to $12.3 billion. Investors will focus on the company's ability to maintain strong momentum in its orders. Analysts' Views Ahead of GE Aerospace's Q2 Earnings Heading into Q2 results, Citi analyst Jason Gursky increased the price target for GE Aerospace stock to $296 from $227 and reiterated a Buy rating. As part of the preview of the Q2 earnings of the aerospace and defense sector, the 5-star analyst stated that he sees continued momentum across the group. Also, Bernstein analyst Douglas Harned reiterated a Buy rating on GE stock with a price target of $254. The 4-star analyst noted that the investor update planned for June 17th in Paris was canceled in the wake of the Air India 787 crash. Harned added that his expectation for the investor update was that the company would provide some upside to its 2025 guidance and longer-term outlook. Meanwhile, his discussions with GE, Safran (SAFRY), and Airbus (EADSF) indicated that LEAP Engine deliveries improved significantly in Q2, enabling Airbus to maintain its 820 airplane delivery guidance. That said, only 21 LEAP engine-powered A320 family airplanes were delivered in June, implying that there is a long way to go in the second half. Harned stated that he will seek further clarity on LEAP deliveries. GE has maintained the guidance at a 15% to 20% increase in LEAP engine deliveries for 2025. The analyst expects GE to provide positive commentary on trends for spare parts and maintenance, repair, and overhaul (MRO) activity, which is the largest source of earnings growth for the company. Harned also expects the widebody engine aftermarket to remain strong. AI Analyst Is Cautious on GE Stock Ahead of Q2 Print TipRanks' AI stock analysis assigns a Neutral rating to GE Aerospace stock, with a price target of $269, indicating a 1.64% upside potential. The AI analyst's rating is based on strong financial performance, offset by valuation concerns and technical indicators that indicate a potential pullback. Here's What Options Traders Anticipate Ahead of GE Aerospace's Q2 Earnings Using TipRanks' Options tool, we can see what options traders are expecting from the stock immediately after its earnings report. The expected earnings move is determined by calculating the at-the-money straddle of the options closest to expiration after the earnings announcement. If this sounds complicated, don't worry, the Options tool does this for you. Indeed, it currently says that options traders are expecting about a 6.04% move in either direction in GE stock in reaction to Q2 results. Is GE Stock a Good Buy Now? With 12 Buys and one Hold recommendation, GE Aerospace stock scores a Strong Buy consensus rating on TipRanks. The average GE stock price target of $250.30 indicates a possible downside of 5.4% from current levels.
CNBC
23-06-2025
- Business
- CNBC
Defense stocks were already outperforming. How the Iran conflict changes their outlook
Defense stocks moved higher again on Monday as investors reacted to the continued escalation of the conflict in the Middle East, which brings with it the potential for long-term changes in military spending. Bernstein analyst Douglas Harned said in a note to clients that this could prove to be an inflection point for the defense sector but it is still too soon to tell. "Events such as this have historically led to significant changes in defense spending and for the trajectory of defense stocks. But, the ultimate paths for the geopolitical environment and scale of military threats determine the outcome," Harned said. The behavior of the largest ETF tracking the sector could be a sign that investors are not fully betting on a widespread, long-term conflict. Overall, the iShares U.S. Aerospace and Defense ETF (ITA) has gained almost 17% since the start of May, with just nine down days compared to 27 up days, and is well ahead of the broader market year to date. However, the fund is also little changed since its previous record closing high June 9. ITA 3M mountain This major defense sector ETF has not made a new high in two weeks. Other major funds like the Invesco Aerospace & Defense ETF (PPA) and the SPDR S & P Aerospace Defense ETF (XAR) show similar patterns. Harned suggested that the idea of a weakened Iran could be behind some of the recent stalling of the rally in defense stocks, but said there is risk that the perceived danger in the region increases again. "We could see ongoing US involvement (despite administration statements to the contrary) or aggressive efforts to fill the vacuum by Russia or China. These outcomes could lead to prolonged instability and rising global defense spending - in other words, the extended escalation scenario above. Much is left to play out here," Harned wrote. The Bernstein note was published before Iran retaliated with a strike on a U.S. military base in Qatar. Another factor to keep in mind that it is not just spending by the U.S. military that can boost this sector. Jefferies analyst Sheila Kahyaoglu pointed out in a note to clients that there could a reminder of that at this week's NATO summit. "NATO is expected to commit to 3.5% of GDP on defense at the upcoming summit from 2% today, which represents $150BB+/yr of incremental procurement, of which historically has been 2/3rds to US products," the Jefferies note said. To be sure, trying to sort through the daily headlines of this conflict could make less investment sense than pulling back to see that defense stocks have been long-term winners. "Over the two and a half-year period from the start of 2023 through June 20, 2025 the three aerospace and defense ETFs showed greater cumulative price appreciation compared to a fund that replicates the S & P 500. The aerospace and defense stocks also outperformed the S & P 500 fund over 1-, 3-, 5 and 10-year periods," Oppenheimer chief investment strategist John Stoltzfus said in a note to clients. — CNBC's Michael Bloom contributed reporting.
CNBC
20-06-2025
- Business
- CNBC
The scale of Trump's 'Golden Dome' is a boon for defense stocks even if it isn't completed, says Bernstein
Major defense stocks can still benefit even if President Donald Trump 's "Golden Dome" project fails, according to Bernstein. The prospect of completing the missile defense system before the end of Trump's term in 2029, which the president has cited as his goal for the project, is highly unlikely, analyst Douglas Harned wrote in a note to clients last week. However, that doesn't mean the effort won't drive business for the defense industry, he said. "Even if the system fails to deliver, we expect elements to survive and for companies to profit off efforts, even when they do not succeed — and spending could go much higher," Harned said. Creating such an expansive defense system will likely require contributions and cooperation from the entire industry, Harned explained. Also, Trump has also mentioned extending contracts to some nontraditional companies, Harned said, adding that this decision may not make the project any easier. "While we see little chance that the system will be complete within three years, we expect money will be spent and benefit most major defense contractors," he said. Harned expects L3Harris Technologies , RTX, Northrop Grumman , Lockheed Martin , BAE Systems and Boeing will be among the beneficiaries. Bernstein rates Boeing and L3Harris Technologies overweight, and has a market perform rating on the rest. Harned's $273 per share price target on L3Harris implies nearly 10% upside from Wednesday's $248.83 close, while his $249 price target for Boeing suggests roughly 25% upside. Boeing shares closed at $197.68 on Wednesday, giving it a 13% year to date gain. L3Harris shares are up 19% over the same period. (Markets were closed Thursday.) Trump estimated last month that the project will cost roughly $175 billion, but Harned anticipates it will ultimately cost more than that. About $25 billion has already been included in the 2026 U.S. defense budget, according to Trump. The project's ambitions are a big challenge, according to the analyst. "In order to truly defend the entire US," he said, "it will be necessary to go back to a complex multi-layered system, that can address a wide range of attacks." "The cost of true coverage of the US will be extreme, with the problem that the system would always need to evolve as enemies evolve their capabilities," Harned said. "The situation is analogous to cybersecurity. It is much less expensive to attack than it is to defend."
CNBC
05-06-2025
- Business
- CNBC
Wall Street sentiment on Boeing is improving as 737 MAX production increases
Sentiment on Wall Street been strengthening steadily on Boeing shares, with the aerospace behemoth finally gaining some momentum. Sixty-nine percent of analysts surveyed by FactSet rate Boeing either buy or overweight. That's up from 52% at the end of 2024. Consensus price targets call for about 2% upside from Wednesday's close. The stock has been on a tear in 2025 as well, with a gain of nearly 20%, while the S & P 500 has ticked up 1.5%. JPMorgan, Wolfe Research and Bernstein are among the Wall Street shops that have raised price targets for Boeing stock over the past month. JPMorgan and Wolfe Research both attributed their more upbeat view to the improved pace of production for the troubled 737 MAX and a record-breaking order from Qatar Airways that followed President Donald Trump's visit to the Middle Eastern country. For Bernstein analyst Douglas Harned, Boeing's ability to steadily increase monthly production of its 737 MAX, with the hopes of stabilizing at around 38 per month, is a key reason he thinks sentiment has shifted. "This stock is a momentum-type stock, and people will want to be in it well ahead of when they're actually there," Harned told CNBC when discussing the company's monthly production goals. "What you've seen is slowly, but surely, skeptical people have started to see the evidence — or hear about it at least — in a more compelling way than in the past." Boeing CEO Kelly Ortberg said last month that the company was resuming plane deliveries to China in June, after the Trump administration's trade war prompted a pause. Ortberg also told Bernstein at the firm's Strategic Differences Conference last month that Boeing could produce as many as 42 737 MAX planes by the end of the year. "We think of this as truly 'back to the future' as we look at how the stock behaved back before 2019, prior to the 737MAX groundings and Covid, when there was optimism about the future," Harned wrote in a Monday note, where he also labeled Boeing stock a top pick. Harned's $249 per share price target implies about 17% upside from Wednesday's $211.98 close. BA YTD mountain Boeing stock in 2025. Boeing's troubles extend back to 2018, when Lion Air Flight 610 crashed killing all 189 aboard. After a second deadly crash, the 737 MAX fleet was grounded for 20 months . Just last year, Boeing faced more trouble after the door flew off of one of its 737 MAX 9's midair. Wolfe Research analyst Myles Walton said in a May note to clients that he had already been optimistic that 2025 would see significantly improved production times for the 737 MAX fleet, however, the Qatar order provided more confidence that the stock could continue to run. "A Big Beautiful Order should help (not yet) big beautiful cash flow," the analyst said. Walton upped his price target to $230 per share from $195 last month, which equates to about 9% upside from Wednesday's close. "With balance sheet concerns addressed for the next few years and a backlog of ~$500b, we see potential for BA to outperform if the company can improve execution," JPMorgan analyst Seth Seifman wrote in a note last month. "Specifically, this means gradually increasing production of 737s and 787s while bringing the 777X closer to entering service." Despite Seifman's optimism, JPMorgan's $200 per share price target implies shares could slide 6% from here.
CNBC
20-05-2025
- Business
- CNBC
Bernstein raises its price target on this stock with a 'history of momentum'
Bernstein is doubling down on its bullish outlook on Boeing . Analyst Douglas Harned maintained his outperform rating on Boeing shares and assigned a fresh price target of $249, up from $218. His new target suggests roughly 21% upside for the stock, which is up 16% this year. Harned sees a strong growth runway for Boeing and said its defense business could return to being a powerful cash generator. He also highlighted recent developments such as Boeing's restart of deliveries to China, its deal with Qatar Airways announced last week to provide up to 210 widebody jets and easing tariff concerns. "Positive events support the stock's upward momentum," the analyst wrote in a Monday note to clients. "Last week, we saw large new widebody orders, a restart of deliveries to China, and support for defense programs, raising our confidence in Boeing's growth path. There is still more upside potential." "None of this is without risk, given Boeing's many missteps over the last decade. But, as positive elements appear to line up, we believe there is more risk in not owning a stock with a history of momentum," Harned added. To be sure, the analyst still has concerns about seemingly light May 737 deliveries so far and timing for certification on Boeing's 737 Max 7 and Max 10 aircrafts. Harned's rating comes nearly a month after he upgraded Boeing to outperform from market perform. The analyst had cited Boeing's progress on 737 Max and 787 production ramps, improvement in defense performance, and strong cash position that outweighed concerns of tariff impacts as his reasoning for the upgrade. Analysts polled by LSEG have an average price target on Boeing shares that indicate just 1% potential upside. Twenty of the 29 covering the stock have a strong buy or buy rating.
