GE Aerospace
The jet-engine maker that sells the engine at a low margin, then supplies the approved parts and overhauls for as long as the aircraft flies.
Our viewNeutral Medium conviction
The scores
The profile · 1-4
Growth3/4 ↑
Fast and organic, but the record at this rate is two years and GE's own guide halves the second half.
Business quality4/4 →
Both attackers concede the position in their own filings, and it survived the pandemic and a live durability problem.
Financial position3/4 →
Net borrowings near one year of guided cash, no maturity wall - but the plan now needs new debt for an $11.75B purchase.
Execution record3/4 ↑
Eight beats and two raises, but the largest capital decision it has made is three days old and closes in 2027.
Per share capture4/4 →
Count down 1.07% in six months, $4.22B of buybacks against modest issuance, the acquisition paid in cash rather than stock.
Potential3/4 →
A bounded upside that is substantially contracted - $178.71B of filed services orders - rather than transformative or merely expected.
Risk profile3/4 →
One serious dependency, disclosed and survivable: $36.2B of old insurance promises that may need cash, with no named customer concentration.
Valuation2/4 →
The price pays for the plan and the 2028 margin turn beyond it; little is left if that only half-happens.
Evidence quality3/4 →
Central facts are filed and corroborated from rivals' filings, but the forward margin claim is management's and verifiable nowhere.
The Verdict
We rate GE Aerospace neutral. It sells jet engines at a low margin, then supplies their approved parts and overhauls for as long as the aircraft flies, and most of its revenue is that aftermarket. The business is strong and well protected, better evidenced than the market's own reasons for it. But the price is full: it already assumes a margin recovery that management dates years ahead and no filing carries, so buyers pay up front for it. The view hinges on whether sales keep growing quickly while the company's own forecast says growth slows. It is a superb business, with no room left if the recovery is late.
The long caseAir travel keeps growing, and every engine flying must come in for parts and overhauls on a schedule airlines do not set, so GE earns from each engine for decades.
The evidence under this - 8 claims
C01facthigh confidence
GE Aerospace's installed base is approximately 50,000 commercial and 30,000 military engines, and aftermarket services are about 70% of revenue.
C06facthigh confidence
GE Aerospace's Q2 2026 total revenue was $13.35B, up 21%, and adjusted revenue was $12.63B, up 24%; the difference is $715M of run-off insurance revenue the company excludes.
C07facthigh confidence
GE Aerospace's Q2 2026 operating profit was $2.75B, up 18%, at a margin of 21.7% against 23.0% a year earlier - so profit grew more slowly than revenue and the margin fell 1.3 percentage points.
C09management claimmedium confidence
Management says three things are compressing margin - growth in installed engines sold at low margin, LEAP service margins below the services portfolio, and GE9X losses - and expects LEAP service margins in line with the total services portfolio by 2028, GE9X losses to peak by 2028, and margin expansion for the company from 2028 onwards.
against this
- None of it appears in a filing. GE publishes no margin by engine programme, no LEAP services margin and no GE9X loss figure, so there is nothing to check the 2028 turn against and nothing to notice if it slips.
- 2028 is two years beyond the guidance horizon. The same management declined to raise guidance in April 2026 on a strong first quarter, citing uncertainty it could not see through one quarter ahead.
- The chief financial officer also said the external channel will take about 30% of LEAP services by 2030. A third of the work moving to third-party shops is a margin mix change running the other way, and GE publishes no attach rate that would let a reader weigh the two.
- The company has said LEAP services broke even only in 2024, so the starting point of the recovery is recent and the slope is entirely asserted.
C12estimatemedium confidence
At $324.15 on 2026-09-11, GE Aerospace's market value of $336.33B is $37 for each dollar of the midpoint of the free cash flow guided for 2026, a yield of 2.7%; that cash would have to roughly double for the yield to reach 5% at the same price, and the five-analyst 2030 earnings estimate of $12.98 still leaves the shares at $25 for each dollar of profit four years out.
derivedMarket value and price from the research pack of 2026-09-11; free cash flow midpoint of $9.05B from the guidance range GE issued on 2026-07-16; the 2030 earnings estimate is the vendor panel's, carried in the same pack and struck by five contributors.
against this
- Free cash flow conversion above 100% of adjusted net income is not a steady state and management says it will normalise, so the denominator is currently flattered - which makes the multiple look better than the underlying one, not worse.
- The 2030 estimate rests on five contributors, against twelve for 2028. A four-year-out consensus from five people is a thin base for any statement about what is priced.
- The shares are 16.6% below their 52-week high and the 14-day relative strength index is 34.9, so some of the premium has already come out; the multiple is not being struck at the top.
- GE has no usable multiple history to compare this against - the research pack's prior-year medians span years when the company also owned GE HealthCare and GE Vernova.
C03facthigh confidence
HEICO states in its own annual report that the three principal jet engine makers - General Electric including CFM International, Pratt & Whitney and Rolls-Royce - have historically been the sole source of substantially all replacement parts for their engines.
against this
- The company saying it is the company trying hardest to break it: HEICO exists to sell approved non-OEM parts, has roughly 20,000 approvals and adds 400 to 550 a year.
- The word is 'historically'. HEICO's own filing calls the approval process a barrier to entry rather than a wall, and says the rate at which competitors can bring products to market is limited rather than zero.
- GE is itself widening the channel: its 10-K says it sells spare parts to third-party overhaul shops and licenses maintenance technology to them, so the sole-source position is partly one GE chooses how far to enforce.
C05facthigh confidence
StandardAero, which calls itself the world's largest independent pure-play provider of aerospace engine aftermarket services, holds its authorisations from the engine makers, pays them an authorisation fee and in some cases annual fees and royalties, and was the first independent CFM LEAP Premier MRO provider in the Americas.
against this
- The same filing names a loss of OEM authorisation as a principal risk, which says the licence is revocable and therefore that it is a commercial relationship rather than a permanent tax.
- StandardAero also reports that its authorisations have in the past been renewed or extended at expiration, so in practice the engine maker has not used the leverage the licence gives it.
- It competes for overhaul labour, which is real revenue GE loses when a shop visit goes elsewhere - the royalty does not make GE indifferent to who performs the work.
C13estimatehigh confidence
GE's October 2026 guidance implies fourth-quarter adjusted revenue growth of roughly 8% to 12% against 18% in the third quarter, and fourth-quarter free cash flow growth of roughly 34% to 51% against a 14% fall in the third quarter.
derivedNine-month 2026 adjusted revenue of $37.53B and free cash flow of $6.73B from the Q3 2026 release, subtracted from the full-year guide (about 19% to 20% growth on the 2025 base of $42.32B; free cash flow of $9.1B-$9.4B) and compared with the fourth quarter of 2025 implied by the FY2025 release ($11.86B of adjusted revenue and $1.77B of free cash flow).
against this
- Management gave the reason unprompted: the second half of 2025 was $3B larger than the first half of 2025, so the comparison base is materially harder rather than the run rate being lower.
- The chief financial officer said more than 95% of Q3 2026 spare-parts revenue was already in backlog and that engines off wing plus planned removals exceed the full-year shop-visit guide by over 40%, which is visibility a conservative guide would carry.
- GE has beaten in each of the last eight quarters, so a guide that implies deceleration has a record of being beaten.
- The Q3 call gave the reason for the 14% fall: working capital was a use, as receivables grew with the timing of services billings and a larger balance due from airframers, partly offset by contract assets. That is timing rather than lower earnings, but it is management's account and the receivable has to be collected in the fourth quarter for the guide to hold.
- 2026-10-20editedThe Q3 2026 print resolved the second-half test; the estimate is re-struck on the October guide for the fourth quarter alone.
- 2026-10-21editedThe Q3 call explained the free cash flow fall as receivables timing; counter-evidence added, estimate unchanged
The company
An airliner is sold with its engines, and GE Aerospace makes its money on them mostly later. It has about 50,000 commercial and 30,000 military engines in service, and every one needs parts and overhauls for as long as it flies.
Its best-selling engine for single-aisle jets, the LEAP, is built by CFM International, a 50-50 venture with Safran, so Safran takes half the economics of that franchise.
The evidence under this - 2 claims
C01facthigh confidence
GE Aerospace's installed base is approximately 50,000 commercial and 30,000 military engines, and aftermarket services are about 70% of revenue.
C35facthigh confidence
CFM International, which builds the LEAP and the CFM56, is a 50-50 non-consolidated joint venture with Safran Aircraft Engines; GE accounts for it by the equity method and makes substantial sales of parts and services to it.
How it makes money
The engine is the entry ticket; the parts are the business. Spare parts alone are about 40% of revenue, and $178.71B of the $210.79B of contracted work at June was service rather than engines.
Even independent shops that overhaul GE engines pay GE for the right, through a licence fee and sometimes royalties.
The evidence under this - 3 claims
C39management claimmedium confidence
Spare parts are about 40% of GE Aerospace's total revenue, and spare-parts orders grew about 40% year on year through the first two months of Q2 2026 before normalising.
against this
- It exists only on the call. The 10-K and 10-Q disaggregate revenue into equipment and services and never split services into parts and labour, so the 40% cannot be checked against any filed table.
- Management gave the figure while walking back a stronger intra-quarter number it called unsustainable, so the context was a correction rather than a disclosure.
C10facthigh confidence
GE Aerospace's remaining performance obligation was $212.08B at 30 September 2026, of which services $178.75B and equipment $33.34B, up $21.5B or 11% from 31 December 2025; the measure excludes any purchase order the customer can cancel without incurring a substantive penalty.
- 2026-10-20editedRe-sourced to the Q3 2026 10-Q: contracted work rose to $212.08B at 30 September 2026.
C05facthigh confidence
StandardAero, which calls itself the world's largest independent pure-play provider of aerospace engine aftermarket services, holds its authorisations from the engine makers, pays them an authorisation fee and in some cases annual fees and royalties, and was the first independent CFM LEAP Premier MRO provider in the Americas.
against this
- The same filing names a loss of OEM authorisation as a principal risk, which says the licence is revocable and therefore that it is a commercial relationship rather than a permanent tax.
- StandardAero also reports that its authorisations have in the past been renewed or extended at expiration, so in practice the engine maker has not used the leverage the licence gives it.
- It competes for overhaul labour, which is real revenue GE loses when a shop visit goes elsewhere - the royalty does not make GE indifferent to who performs the work.
Where the money comes from, stream by stream
| Stream | Share of sales (H1 2026) | How it earns it |
|---|---|---|
| Commercial engine services | 55.4% | Spare parts, overhauls and service agreements on the installed commercial fleet, including licence fees from independent shops. |
| Commercial engines | 17.1% | New commercial jet engines sold to planemakers and airlines, at a low or negative margin. |
| Defense & Propulsion equipment | 13.0% | Military engines, aeroderivative units and propulsion components, largely funded by US and allied defence budgets. |
| Defense & Propulsion services | 12.8% | Spares, repairs and support for military engines and other propulsion products. |
| Run-off insurance | 5.8% | Premiums and investment income on a closed book of long-term care and annuity reinsurance, excluded from adjusted revenue. |
Who runs it
Larry Culp, who ran Danaher for fourteen years, took over GE in 2018, broke it into three companies and now runs the aerospace business that remained. Insiders own well under 1% of the shares, mostly Culp's. His bonus rides on sales growth, profit and cash, and his long-term shares on three years of earnings per share and cash, adjusted for how the stock does against other industrials. Nothing pays on return on capital.
The evidence under this - 3 claims
C45facthigh confidence
H. Lawrence Culp, Jr., formerly chief executive of Danaher from 2001 to 2014, became chairman and CEO of General Electric in 2018, CEO of GE Aerospace in June 2022 and its chairman in April 2024; Rahul Ghai, formerly CFO of Otis and Harris, has been CFO since August 2022; Mohamed Ali became CEO of Commercial Engines & Services on 1 February 2026.
C43facthigh confidence
At 31 December 2025 GE Aerospace's 16 current directors and executive officers as a group beneficially owned 1,964,879 shares, under 1% of the 1,044,829,602 outstanding at the March 2026 record date; H. Lawrence Culp, Jr. held 1,612,480, the largest insider holding; Vanguard (8.4%), BlackRock (7.9%) and Fidelity (6.4%) were the only holders above 5%. There is one share class.
C44facthigh confidence
GE Aerospace's 2025 annual bonus paid 20% on adjusted revenue growth, 40% on operating profit and 40% on free cash flow, all non-GAAP, from 0% to 200% of target; the CEO's paid $7.52M against a $4.0M target. The 2025 PSUs pay on cumulative three-year adjusted EPS and free cash flow, half each, adjusted up to 20% for shareholder return against the S&P 500 Industrials and capped at 175%; the 2023 PSUs vested at 175%.
against this
- Every metric is a measure GE defines itself (C18): operating profit and free cash flow exclude what the company chooses, so the plan pays on the same non-GAAP figures it guides to.
- Nothing pays on return on capital, so the $11.75B CPP purchase (C16) costs the plan nothing unless it dents three-year EPS or cash.
Why it wins, and who could beat it
Why customers come back
Every replacement part fitted to a jet engine needs a government approval for that engine, and every overhaul follows a manual the engine's designer writes. GE holds both, and an airline cannot change engines halfway through an aircraft's life.
The evidence comes from rivals' own filings. HEICO, which makes approved copies, says engine makers have historically been the sole source of substantially all replacement parts. The world's largest independent overhaul shop works under a GE licence and pays GE for it.
The evidence under this - 3 claims
C03facthigh confidence
HEICO states in its own annual report that the three principal jet engine makers - General Electric including CFM International, Pratt & Whitney and Rolls-Royce - have historically been the sole source of substantially all replacement parts for their engines.
against this
- The company saying it is the company trying hardest to break it: HEICO exists to sell approved non-OEM parts, has roughly 20,000 approvals and adds 400 to 550 a year.
- The word is 'historically'. HEICO's own filing calls the approval process a barrier to entry rather than a wall, and says the rate at which competitors can bring products to market is limited rather than zero.
- GE is itself widening the channel: its 10-K says it sells spare parts to third-party overhaul shops and licenses maintenance technology to them, so the sole-source position is partly one GE chooses how far to enforce.
C05facthigh confidence
StandardAero, which calls itself the world's largest independent pure-play provider of aerospace engine aftermarket services, holds its authorisations from the engine makers, pays them an authorisation fee and in some cases annual fees and royalties, and was the first independent CFM LEAP Premier MRO provider in the Americas.
against this
- The same filing names a loss of OEM authorisation as a principal risk, which says the licence is revocable and therefore that it is a commercial relationship rather than a permanent tax.
- StandardAero also reports that its authorisations have in the past been renewed or extended at expiration, so in practice the engine maker has not used the leverage the licence gives it.
- It competes for overhaul labour, which is real revenue GE loses when a shop visit goes elsewhere - the royalty does not make GE indifferent to who performs the work.
C29facthigh confidence
RTX states in its own 10-K that customers, including governments, may purchase parts from suppliers other than the original equipment manufacturer, which affects spare parts sales.
The threat
The copies are coming, slowly. HEICO holds about 20,000 approved parts across all engines, adds 400 to 550 a year, and sells them cheaper than the maker. And thirty years of parts only begins if GE wins the engine order first: Pratt & Whitney competes for the same single-aisle Airbus jets.
The evidence under this - 2 claims
C04factmedium confidence
HEICO has developed approximately 20,000 parts carrying FAA Parts Manufacturer Approval and is adding new approvals at roughly 400 to 550 a year.
C28facthigh confidence
RTX's Pratt & Whitney designs, manufactures and services large widebody and narrowbody commercial engines and provides aftermarket overhaul across them, and Airbus is its largest commercial customer at 29% of segment sales in 2025.
The rivals: HEI, SARO, RTX, and 1 more that is private, in-house or listed abroad.
Who else does this, rival by rival
| Ticker | Rival | How far along | Priced against it |
|---|---|---|---|
| HEI | HEICO CorporationPriced against it: One segment only | On sale | One segment only |
| SARO | StandardAero, Inc.Priced against it: One segment only | On sale | One segment only |
| RTX | Pratt & Whitney's PW1000G geared turbofan (RTX Corporation)Priced against it: Same product | On sale | Same product |
| Not listed | Used serviceable material - parts harvested from retired CFM56 engines and resoldPriced against it: Not listed | On sale | Not listed |
How big it could get
How big this could get
Boeing expects the world's airliner fleet to grow nearly 80%, to more than 50,000 aircraft by 2045, and support and services to be worth $4.9 trillion over those twenty years. Those are a planemaker's forecasts.
The nearer prize is already flying. GE says 30% of its older CFM56 engines have not had a first overhaul and two-thirds have not had a second, and 70% of its large GE90 engines still await a second.
The evidence under this - 3 claims
C24management claimmedium confidence
Boeing's 2026 Commercial Market Outlook forecasts the world commercial airplane fleet growing nearly 80% to more than 50,000 airplanes by 2045, needing nearly 44,000 new deliveries, with passenger traffic growing 4% a year and global air traffic doubling between 2026 and 2045.
against this
- Boeing is forecasting the market it sells into, and the forecast is published at an airshow. It is outside GE, not outside the industry.
- The World Bank's measured count of air transport passengers carried was 4.269 billion in 2023, the latest year published, still 4.2% below the 4.456 billion of 2019 - so the measured series had not regained its pre-pandemic peak when the forecast of doubling was written.
- GE itself said first-half 2026 departures were roughly flat and expected only a gradual return to modest growth in the second half.
C25management claimmedium confidence
Boeing's 2026 Services Market Outlook forecasts a $4.9 trillion commercial aviation support and services market over the twenty years to 2045, alongside demand for more than 2.4 million new aviation professionals including 728,000 maintenance technicians.
against this
- The figure covers the whole services market - pilot and technician training, ground handling, digital tools and airframe maintenance - and GE sells none of those. The engine share of it is not disclosed and Boeing has no reason to break it out.
- It is Boeing's forecast of a market Boeing Global Services competes in, so the issuer is a rival for part of the same spend rather than a neutral measurer.
- The 728,000 technicians the same document calls for is the constraint on it: a services market that cannot be staffed is not a services market that gets billed.
C23management claimmedium confidence
Management says 30% of the CFM56 fleet has not had a first shop visit and two-thirds have not had a second, that 70% of the GE90 installed base has yet to see a second shop visit, that CFM56 work scopes should stay stable to 2028 or 2029, and that there is hardly any used material in the market with retirements low.
against this
- It is a call figure with no filed counterpart. GE publishes no fleet-age or shop-visit-history table, so neither the 30% nor the two-thirds can be checked.
- The same call flagged airline financial pressure from higher fuel prices, which is the condition under which retirements accelerate and used parts flood the channel - the two statements sit in tension.
- Management also said there are fewer long-term service agreements on CFM56 engines than on widebodies, so a large part of this runway is work GE expects to win rather than work it has contracted.
Who has signed
Contracted work stood at $210.79B at the end of June, up 11% since December, and it counts only orders a customer cannot cancel without a real penalty. The headline deals are softer: IndiGo's agreement for more than 1,000 engines is a memorandum, not a firm order.
The evidence under this - 2 claims
C10facthigh confidence
GE Aerospace's remaining performance obligation was $212.08B at 30 September 2026, of which services $178.75B and equipment $33.34B, up $21.5B or 11% from 31 December 2025; the measure excludes any purchase order the customer can cancel without incurring a substantive penalty.
- 2026-10-20editedRe-sourced to the Q3 2026 10-Q: contracted work rose to $212.08B at 30 September 2026.
C42factmedium confidence
CFM International signed a memorandum of understanding with IndiGo at the Farnborough Airshow in July 2026 covering more than 1,000 LEAP-1A engines; it is a memorandum rather than a firm order and carries no disclosed price or delivery schedule.
The results
The numbers
Is it growing?Steady
Sales grew 20% over the twelve months to Sep 2026, about the same pace as the 18% in the year to Dec 2025.
Is it profitable?Healthy
It keeps 17% of sales as profit, down from 27% in the year to Dec 2023.
How steady is it?Swingy
Yearly sales growth has ranged from −48% to +21% over the last 5 years, with sales falling in 2 of them.
Does it earn good returns?Strong
Shareholders' money earned 50% a year, up from −19% in the year to Dec 2021.
Is it making cash?Strong
It turned 15% of sales into free cash, $7.99B over the last twelve months.
Is profit turning into cash?Partly
Free cash flow was 0.9 times net income.
Are shares being diluted?Shrinking
The share count fell 5.2% in 4.8 years.
All the numbers
Filed figures from the company's 10-K and 10-Q, read 2026-10-20. Fiscal years end in December.
| Dec 2021 | Dec 2022 | Dec 2023 | Dec 2024 | Dec 2025 | 12 mo to Sep 2026 | |
|---|---|---|---|---|---|---|
| Size and growth | ||||||
| Sales | $56.5B | $29.1B | $35.3B | $38.7B | $45.9B | $52.6B |
| Sales growth | −2.7% | −48% | +21% | +9.5% | +18% | +20% |
| Profit | ||||||
| Net margin | −11% | 1.2% | 27% | 17% | 19% | 17% |
| What growth costs, per sales dollar | ||||||
| Research and development | 3.0% | 2.8% | 2.9% | 3.3% | 3.4% | 3.4% |
| Selling, general and admin | 14% | 13% | 11% | 11% | 8.9% | 8.2% |
| Pay in shares | 0.5% | 0.5% | 0.5% | 0.7% | 0.7% | - |
| Capital spending | 2.0% | 2.3% | 2.4% | 2.7% | 2.8% | 2.7% |
| Cash | ||||||
| Cash from operations | −$850M | $4.03B | $4.61B | $5.82B | $8.54B | $9.43B |
| Free cash flow | −$1.96B | $3.37B | $3.75B | $4.79B | $7.27B | $7.99B |
| Balance sheet | ||||||
| Debt | $35.1B | $24.1B | $20.5B | $19.3B | $20.5B | $19.3B |
| Returns and shares | ||||||
| Shares (diluted) | 1.10B | 1.10B | 1.10B | 1.09B | 1.07B | 1.04B |
What growth costs
Running costs grow slower than sales, so overhead gets cheaper per dollar. But growth now comes partly from new engines sold below cost, so every extra delivery pulls the margin down until those engines come back for parts and overhauls. Research and factory spending also rise a little faster than sales.
The evidence under this - 2 claims
C47facthigh confidence
Per sales dollar, GE's own R&D (the income-statement line, $1.58B in 2025, excluding customer-funded work) rose from 2.9 cents in 2023 to 3.4 in 2025, capital spending from 2.4 to 2.8 and stock pay from 0.5 to 0.7, while selling, general and administrative costs fell from 11.4 cents to 8.9.
against this
- Total R&D including customer and partner funding was $2.99B in 2025 (C34), about twice the line counted here, so the cost of the next engine generation is larger than the per-dollar figure shows.
- The years before 2023 include businesses since spun off, so the trend is three years long.
C48facthigh confidence
In the first half of 2026 GE's cost of equipment sold was $7,099M against $6,870M of equipment sales, against $5,090M on $5,496M a year earlier, while cost of services fell to 54.7% of services sales from 56.8%.
The last report (16 Jul)
Quarter ended June 2026, filed figures.
21%
Sales growth
against the same quarter a year earlier
7.7%
Growth from the quarter before
against -2.6% the quarter before that
In the September quarter sales grew 18% and operating profit 30%, helped by the engine business: engine orders rose 49% and contracted work rose to $212B. The company raised its 2026 forecast on every line, for the second time in three months.
The one weak line was free cash flow, which fell 14% in the quarter, though it is still up 13% over nine months. To hit its new cash forecast, the fourth quarter must be a third to a half better than a year earlier.
What it did to the thesisSales growth beat the mark we set and the margin held up better than in June. Falling free cash flow was one of our warning signs, so the print neither confirmed nor broke the case. The view stays Neutral: the price still pays for a recovery no filing carries.
The quarter in detail
Sales growth from the previous quarter, filed figures. The company has restated its own history, so a quarter either side of the restatement may describe a different business; n/c marks one that does not compare.
Earnings per share $2.02 against $1.86 expected; $2.26 as filed, the gap being what the company adds back.
The evidence under this - 5 claims
C10facthigh confidence
GE Aerospace's remaining performance obligation was $212.08B at 30 September 2026, of which services $178.75B and equipment $33.34B, up $21.5B or 11% from 31 December 2025; the measure excludes any purchase order the customer can cancel without incurring a substantive penalty.
- 2026-10-20editedRe-sourced to the Q3 2026 10-Q: contracted work rose to $212.08B at 30 September 2026.
C11management claimhigh confidence
GE raised its full-year 2026 guidance on 20 October 2026 to adjusted earnings per share of $8.00-$8.10, operating profit of $10.9B-$11.0B, free cash flow of $9.1B-$9.4B and adjusted revenue growth of about 19% to 20%, against 2025 actuals of $6.37, $9.1B, $7.7B and $42.3B. The 16 July guide was $7.65-$7.85, $10.55B-$10.75B and $8.9B-$9.2B.
against this
- The cash guide needs a fourth quarter of free cash flow roughly a third to a half above the fourth quarter of 2025, after the third quarter fell 14%.
- The same guide implies fourth-quarter adjusted revenue growth of roughly 8% to 12% against 18% in the third quarter and 23% over nine months.
- Guidance was deliberately held in April 2026 despite a strong first quarter, then raised in July and again in October. A company that can hold and then raise twice in six months sets guidance with a wide margin, which cuts both ways for what a raise signals.
- 2026-10-20editedThe 20 October 2026 release raised the full-year guidance a second time; the 16 July figures are superseded.
C13estimatehigh confidence
GE's October 2026 guidance implies fourth-quarter adjusted revenue growth of roughly 8% to 12% against 18% in the third quarter, and fourth-quarter free cash flow growth of roughly 34% to 51% against a 14% fall in the third quarter.
derivedNine-month 2026 adjusted revenue of $37.53B and free cash flow of $6.73B from the Q3 2026 release, subtracted from the full-year guide (about 19% to 20% growth on the 2025 base of $42.32B; free cash flow of $9.1B-$9.4B) and compared with the fourth quarter of 2025 implied by the FY2025 release ($11.86B of adjusted revenue and $1.77B of free cash flow).
against this
- Management gave the reason unprompted: the second half of 2025 was $3B larger than the first half of 2025, so the comparison base is materially harder rather than the run rate being lower.
- The chief financial officer said more than 95% of Q3 2026 spare-parts revenue was already in backlog and that engines off wing plus planned removals exceed the full-year shop-visit guide by over 40%, which is visibility a conservative guide would carry.
- GE has beaten in each of the last eight quarters, so a guide that implies deceleration has a record of being beaten.
- The Q3 call gave the reason for the 14% fall: working capital was a use, as receivables grew with the timing of services billings and a larger balance due from airframers, partly offset by contract assets. That is timing rather than lower earnings, but it is management's account and the receivable has to be collected in the fourth quarter for the guide to hold.
- 2026-10-20editedThe Q3 2026 print resolved the second-half test; the estimate is re-struck on the October guide for the fourth quarter alone.
- 2026-10-21editedThe Q3 call explained the free cash flow fall as receivables timing; counter-evidence added, estimate unchanged
C09management claimmedium confidence
Management says three things are compressing margin - growth in installed engines sold at low margin, LEAP service margins below the services portfolio, and GE9X losses - and expects LEAP service margins in line with the total services portfolio by 2028, GE9X losses to peak by 2028, and margin expansion for the company from 2028 onwards.
against this
- None of it appears in a filing. GE publishes no margin by engine programme, no LEAP services margin and no GE9X loss figure, so there is nothing to check the 2028 turn against and nothing to notice if it slips.
- 2028 is two years beyond the guidance horizon. The same management declined to raise guidance in April 2026 on a strong first quarter, citing uncertainty it could not see through one quarter ahead.
- The chief financial officer also said the external channel will take about 30% of LEAP services by 2030. A third of the work moving to third-party shops is a margin mix change running the other way, and GE publishes no attach rate that would let a reader weigh the two.
- The company has said LEAP services broke even only in 2024, so the starting point of the recovery is recent and the slope is entirely asserted.
C06facthigh confidence
GE Aerospace's Q2 2026 total revenue was $13.35B, up 21%, and adjusted revenue was $12.63B, up 24%; the difference is $715M of run-off insurance revenue the company excludes.
What management did with the money
It bought back 14.1 million shares for $4.22B in the first half and raised the quarterly dividend to $0.47 from $0.36. In September it agreed to buy Consolidated Precision Products, a castings maker, for $11.75B, a little over five quarters of its expected cash, paid with cash and new debt.
The evidence under this - 3 claims
C30facthigh confidence
GE repurchased 14.1 million shares for $4.22B in the first half of 2026, shares outstanding fell to 1,037,562,513 from 1,048,766,702, $17.98B remained of a $20B authorisation at 30 June 2026, and the quarterly dividend rose to $0.47 from $0.36.
C16facthigh confidence
GE Aerospace agreed on 8 September 2026 to acquire Consolidated Precision Products for $11.75B - a castings maker with about $2.0B of expected 2027 revenue - valuing it at about 26 times expected 2027 earnings before interest, tax, depreciation and amortisation before roughly $200M of net synergies and about 18 times after, closing in the second half of 2027, financed with existing cash and new debt, and reaching a double-digit return on invested capital by year five.
sourceGE Aerospace investor presentation on the CPP acquisition,…primaryGE Aerospace press release on the CPP acquisition, Exhibit…primary
against this
- The $2.0B revenue, the $200M of synergies and the year-five return are GE's own projections in its own deal deck. Nothing about them is filed or audited, and no pro forma financial statement for the target exists yet.
- The accretion claim is stated after excluding one-time costs and deal-related amortisation, which is to say it is accretion to a measure that removes most of what an acquisition costs.
- 26 times profit before synergies is close to GE's own enterprise value of 28.4 times trailing profit before depreciation, so GE is paying roughly its own multiple for a foundry - and the shares fell 2.8% the session after the announcement.
- It does not close for a year. Every number in it is a 2027 estimate made in 2026, and GE has no post-separation record of integrating a purchase this size.
C17estimatehigh confidence
The $11.75B price for Consolidated Precision Products is about 1.3 times the free cash flow GE guides for 2026, or a little over five quarters of it.
derived$11.75B from the deal announcement divided by the $8.9B-$9.2B 2026 free cash flow guide, midpoint $9.05B - 1.30 times the year, or 5.2 quarters at the average quarterly rate.
against this
- The cash goes out once and over a period, not in a year: closing is expected in the second half of 2027, and GE says the purchase uses existing cash and new debt rather than a year of operating cash flow.
- GE says capital allocation plans do not change, and $17.98B of a $20B buyback authorisation remained at 30 June 2026 - so the company does not regard the deal as consuming the shareholder return.
- Net borrowings of about $8.9B against guided cash of $9.05B leave real capacity; the ratio is a way of sizing the decision, not evidence that GE cannot afford it.
The price, and where we disagree
In short. Full. A superb business, but the price already pays for its profit recovery arriving on schedule by 2028, and leaves no room if it is late.
Share price
$324.15
close,
Spare cash as a share of the price
2.5%
its 6-year normal 2.7%
The company's own forecast now asks for a stronger fourth quarter in cash and a slower one in sales. The full-year report in January answers it: free cash flow at or above the forecast's low end would confirm the raise, while a miss would show the September fall was the start of something.
The evidence under this - 2 claims
C13estimatehigh confidence
GE's October 2026 guidance implies fourth-quarter adjusted revenue growth of roughly 8% to 12% against 18% in the third quarter, and fourth-quarter free cash flow growth of roughly 34% to 51% against a 14% fall in the third quarter.
derivedNine-month 2026 adjusted revenue of $37.53B and free cash flow of $6.73B from the Q3 2026 release, subtracted from the full-year guide (about 19% to 20% growth on the 2025 base of $42.32B; free cash flow of $9.1B-$9.4B) and compared with the fourth quarter of 2025 implied by the FY2025 release ($11.86B of adjusted revenue and $1.77B of free cash flow).
against this
- Management gave the reason unprompted: the second half of 2025 was $3B larger than the first half of 2025, so the comparison base is materially harder rather than the run rate being lower.
- The chief financial officer said more than 95% of Q3 2026 spare-parts revenue was already in backlog and that engines off wing plus planned removals exceed the full-year shop-visit guide by over 40%, which is visibility a conservative guide would carry.
- GE has beaten in each of the last eight quarters, so a guide that implies deceleration has a record of being beaten.
- The Q3 call gave the reason for the 14% fall: working capital was a use, as receivables grew with the timing of services billings and a larger balance due from airframers, partly offset by contract assets. That is timing rather than lower earnings, but it is management's account and the receivable has to be collected in the fourth quarter for the guide to hold.
- 2026-10-20editedThe Q3 2026 print resolved the second-half test; the estimate is re-struck on the October guide for the fourth quarter alone.
- 2026-10-21editedThe Q3 call explained the free cash flow fall as receivables timing; counter-evidence added, estimate unchanged
C11management claimhigh confidence
GE raised its full-year 2026 guidance on 20 October 2026 to adjusted earnings per share of $8.00-$8.10, operating profit of $10.9B-$11.0B, free cash flow of $9.1B-$9.4B and adjusted revenue growth of about 19% to 20%, against 2025 actuals of $6.37, $9.1B, $7.7B and $42.3B. The 16 July guide was $7.65-$7.85, $10.55B-$10.75B and $8.9B-$9.2B.
against this
- The cash guide needs a fourth quarter of free cash flow roughly a third to a half above the fourth quarter of 2025, after the third quarter fell 14%.
- The same guide implies fourth-quarter adjusted revenue growth of roughly 8% to 12% against 18% in the third quarter and 23% over nine months.
- Guidance was deliberately held in April 2026 despite a strong first quarter, then raised in July and again in October. A company that can hold and then raise twice in six months sets guidance with a wide margin, which cuts both ways for what a raise signals.
- 2026-10-20editedThe 20 October 2026 release raised the full-year guidance a second time; the 16 July figures are superseded.
How we read the multiple
Each year's spare cash, what is left after running and investing in the business, is about 2.5% of today's price. On the higher cash expected for 2026, a buyer pays $37 for each dollar.
For the price to look cheap:
- Spare cash would have to roughly double to reach 5% of today's price.
- Even on analysts' 2030 forecast, buyers would still pay $25 for each dollar of profit.
- So the price already assumes the margin recovery expected from 2028 arrives on time.
Against its own history. Not a fair comparison: those years include GE HealthCare and GE Vernova, since spun off, so this company's own normal cannot be read from them.
The evidence under this - 3 claims
C12estimatemedium confidence
At $324.15 on 2026-09-11, GE Aerospace's market value of $336.33B is $37 for each dollar of the midpoint of the free cash flow guided for 2026, a yield of 2.7%; that cash would have to roughly double for the yield to reach 5% at the same price, and the five-analyst 2030 earnings estimate of $12.98 still leaves the shares at $25 for each dollar of profit four years out.
derivedMarket value and price from the research pack of 2026-09-11; free cash flow midpoint of $9.05B from the guidance range GE issued on 2026-07-16; the 2030 earnings estimate is the vendor panel's, carried in the same pack and struck by five contributors.
against this
- Free cash flow conversion above 100% of adjusted net income is not a steady state and management says it will normalise, so the denominator is currently flattered - which makes the multiple look better than the underlying one, not worse.
- The 2030 estimate rests on five contributors, against twelve for 2028. A four-year-out consensus from five people is a thin base for any statement about what is priced.
- The shares are 16.6% below their 52-week high and the 14-day relative strength index is 34.9, so some of the premium has already come out; the multiple is not being struck at the top.
- GE has no usable multiple history to compare this against - the research pack's prior-year medians span years when the company also owned GE HealthCare and GE Vernova.
C09management claimmedium confidence
Management says three things are compressing margin - growth in installed engines sold at low margin, LEAP service margins below the services portfolio, and GE9X losses - and expects LEAP service margins in line with the total services portfolio by 2028, GE9X losses to peak by 2028, and margin expansion for the company from 2028 onwards.
against this
- None of it appears in a filing. GE publishes no margin by engine programme, no LEAP services margin and no GE9X loss figure, so there is nothing to check the 2028 turn against and nothing to notice if it slips.
- 2028 is two years beyond the guidance horizon. The same management declined to raise guidance in April 2026 on a strong first quarter, citing uncertainty it could not see through one quarter ahead.
- The chief financial officer also said the external channel will take about 30% of LEAP services by 2030. A third of the work moving to third-party shops is a margin mix change running the other way, and GE publishes no attach rate that would let a reader weigh the two.
- The company has said LEAP services broke even only in 2024, so the starting point of the recovery is recent and the slope is entirely asserted.
C20facthigh confidence
GE Aerospace has no usable multi-year multiple history: the research pack's prior-year medians are struck across fiscal years in which the company also owned GE HealthCare and GE Vernova, with FY2021 revenue of $56.47B and FY2022 of $29.14B against FY2025 of $45.86B.
Priced against its rivals
Only RTX sells the same thing to the same buyers as a large part of what it does. A price comparison needs at least two, so the price is judged against its own history instead.
Private or foreign rivals that cannot be priced: Rolls-Royce Holdings plc, Safran S.A. (Safran Aircraft Engines), MTU Aero Engines AG, Lufthansa Technik AG.
Where we disagree with the market
The market believes
A protected business whose maintenance backlog and promised margin recovery justify paying far more than for most industrial companies.
We believe
The protection is real and better evidenced than the market's reasons, but the price already pays for a recovery no filing carries.
Analysts are 24 buy and 11 hold with no sells, and GE has beaten their estimates eight quarters running. Coverage reads its backlog and its beats; we read two rivals' filings for the moat and the second-half arithmetic for growth.
We are wrong if the September quarter's sales grow more than 12% with the margin widening: then the slowdown was caution, not the real rate.
What analysts say, and the evidence
The evidence under this - 4 claims
C32facthigh confidence
GE has beaten the vendor panel's earnings estimate in each of the last eight reported quarters, the narrowest by 8.6%, and raised its 2026 guidance on every line in July 2026 after declining to raise it in April 2026.
C03facthigh confidence
HEICO states in its own annual report that the three principal jet engine makers - General Electric including CFM International, Pratt & Whitney and Rolls-Royce - have historically been the sole source of substantially all replacement parts for their engines.
against this
- The company saying it is the company trying hardest to break it: HEICO exists to sell approved non-OEM parts, has roughly 20,000 approvals and adds 400 to 550 a year.
- The word is 'historically'. HEICO's own filing calls the approval process a barrier to entry rather than a wall, and says the rate at which competitors can bring products to market is limited rather than zero.
- GE is itself widening the channel: its 10-K says it sells spare parts to third-party overhaul shops and licenses maintenance technology to them, so the sole-source position is partly one GE chooses how far to enforce.
C05facthigh confidence
StandardAero, which calls itself the world's largest independent pure-play provider of aerospace engine aftermarket services, holds its authorisations from the engine makers, pays them an authorisation fee and in some cases annual fees and royalties, and was the first independent CFM LEAP Premier MRO provider in the Americas.
against this
- The same filing names a loss of OEM authorisation as a principal risk, which says the licence is revocable and therefore that it is a commercial relationship rather than a permanent tax.
- StandardAero also reports that its authorisations have in the past been renewed or extended at expiration, so in practice the engine maker has not used the leverage the licence gives it.
- It competes for overhaul labour, which is real revenue GE loses when a shop visit goes elsewhere - the royalty does not make GE indifferent to who performs the work.
C13estimatehigh confidence
GE's October 2026 guidance implies fourth-quarter adjusted revenue growth of roughly 8% to 12% against 18% in the third quarter, and fourth-quarter free cash flow growth of roughly 34% to 51% against a 14% fall in the third quarter.
derivedNine-month 2026 adjusted revenue of $37.53B and free cash flow of $6.73B from the Q3 2026 release, subtracted from the full-year guide (about 19% to 20% growth on the 2025 base of $42.32B; free cash flow of $9.1B-$9.4B) and compared with the fourth quarter of 2025 implied by the FY2025 release ($11.86B of adjusted revenue and $1.77B of free cash flow).
against this
- Management gave the reason unprompted: the second half of 2025 was $3B larger than the first half of 2025, so the comparison base is materially harder rather than the run rate being lower.
- The chief financial officer said more than 95% of Q3 2026 spare-parts revenue was already in backlog and that engines off wing plus planned removals exceed the full-year shop-visit guide by over 40%, which is visibility a conservative guide would carry.
- GE has beaten in each of the last eight quarters, so a guide that implies deceleration has a record of being beaten.
- The Q3 call gave the reason for the 14% fall: working capital was a use, as receivables grew with the timing of services billings and a larger balance due from airframers, partly offset by contract assets. That is timing rather than lower earnings, but it is management's account and the receivable has to be collected in the fourth quarter for the guide to hold.
- 2026-10-20editedThe Q3 2026 print resolved the second-half test; the estimate is re-struck on the October guide for the fourth quarter alone.
- 2026-10-21editedThe Q3 call explained the free cash flow fall as receivables timing; counter-evidence added, estimate unchanged
What could go wrong, and how we would know
The risks
- Copies take share. Approved outside parts and independent shops chip at the one thing the moat protects: GE's own parts in GE's own engines.
- An old insurance business. $36.20B of old insurance liabilities against $17.64B of shareholders' equity, and GE names future capital calls as a risk.
- A recovery only management promises. Better LEAP service margins and peak GE9X losses by 2028 are on a call, not in a filing.
- Parts running short. Spare-part shipments delayed for lack of material grew 20% from the quarter before, in June.
- Flat flying. Departures were roughly flat in the first half of 2026, and revenue follows flying.
The evidence under this - 7 claims
C04factmedium confidence
HEICO has developed approximately 20,000 parts carrying FAA Parts Manufacturer Approval and is adding new approvals at roughly 400 to 550 a year.
C05facthigh confidence
StandardAero, which calls itself the world's largest independent pure-play provider of aerospace engine aftermarket services, holds its authorisations from the engine makers, pays them an authorisation fee and in some cases annual fees and royalties, and was the first independent CFM LEAP Premier MRO provider in the Americas.
against this
- The same filing names a loss of OEM authorisation as a principal risk, which says the licence is revocable and therefore that it is a commercial relationship rather than a permanent tax.
- StandardAero also reports that its authorisations have in the past been renewed or extended at expiration, so in practice the engine maker has not used the leverage the licence gives it.
- It competes for overhaul labour, which is real revenue GE loses when a shop visit goes elsewhere - the royalty does not make GE indifferent to who performs the work.
C22management claimmedium confidence
Management says the external channel has risen from under 10% of GE's LEAP services portfolio to the mid-teens and should reach about 30% by 2030, and GE's own 10-K confirms it sells spare parts to third-party overhaul shops and licenses maintenance technology to them.
sourceGE Aerospace second quarter 2026 earnings call transcriptprimaryGE Aerospace Form 10-K for the year ended 31 December 2025primary
against this
- A third of LEAP services performed outside GE's shops is a third of the labour margin leaving, and GE publishes no parts attach rate that would show the parts margin staying behind to replace it.
- StandardAero's own filing shows the other side of the same arrangement and names loss of an OEM authorisation as a principal risk - so the channel is GE's to control today, and GE is choosing to widen it while the aftermarket is capacity-constrained.
- GE's shops are 40% oversubscribed, so widening the external channel now is partly a response to not being able to do the work, which is a weaker reason than choosing the higher-margin half.
C14facthigh confidence
GE Aerospace carries $36.20B of insurance liabilities and annuity benefits at 30 June 2026 against total shareholders' equity of $17.64B; the run-off operation earned $992M before tax in 2025 and $171M in Q2 2026, and GE names the amount and timing of any required future capital contributions to it as a risk.
C09management claimmedium confidence
Management says three things are compressing margin - growth in installed engines sold at low margin, LEAP service margins below the services portfolio, and GE9X losses - and expects LEAP service margins in line with the total services portfolio by 2028, GE9X losses to peak by 2028, and margin expansion for the company from 2028 onwards.
against this
- None of it appears in a filing. GE publishes no margin by engine programme, no LEAP services margin and no GE9X loss figure, so there is nothing to check the 2028 turn against and nothing to notice if it slips.
- 2028 is two years beyond the guidance horizon. The same management declined to raise guidance in April 2026 on a strong first quarter, citing uncertainty it could not see through one quarter ahead.
- The chief financial officer also said the external channel will take about 30% of LEAP services by 2030. A third of the work moving to third-party shops is a margin mix change running the other way, and GE publishes no attach rate that would let a reader weigh the two.
- The company has said LEAP services broke even only in 2024, so the starting point of the recovery is recent and the slope is entirely asserted.
C33management claimmedium confidence
Spare-parts delinquencies - shipments delayed by material availability - grew 20% sequentially in Q2 2026, GE's internal shop capacity is 40% oversubscribed for the year, and engines already off wing plus planned Q3 removals exceed the full-year shop-visit guide by more than 40%. In Q3 2026 the call said delinquency grew again, 'up slightly', while orders rose 23% and about 95% of fourth-quarter revenue was already in backlog.
sourceGE Aerospace second quarter 2026 earnings call transcriptprimaryGE Aerospace second quarter 2026 results release, Exhibit 99…primaryGE Aerospace third quarter 2026 earnings call transcriptprimary
against this
- The same fact is a delivery failure as well as a demand signal: GE has sold parts it cannot ship, and the delinquency grew in a quarter it was calling record output.
- It is unaudited and appears in no filing. The 10-Q describes material availability disruptions qualitatively and puts no number on the backlog of late shipments.
- The chief executive said spare-parts order growth had already normalised from an unsustainable 40% rate in the last weeks of the quarter, so the demand half of the figure was measured at a peak.
- The Q3 call confirmed delinquency rose a second quarter running, which is the 'rising again' mark the next test names; management called it a function of strong demand and said it wants to bring it down in 2027, with no figure given for the size of the backlog of late shipments.
- 2026-10-21editedThe Q3 2026 call, read on 21 October, said spare-parts delinquency grew again in the quarter; the claim now carries the second reading
C27management claimmedium confidence
GE said first-half 2026 departures were roughly flat, that it has observed no change in customer behaviour, and that it expects a gradual return to modest departures growth in the second half.
against this
- The 10-Q names the conflict in the Middle East as a risk to utilisation, prices and airline credit, and says lower shop visit, spare part and spare engine volume could follow - management's confidence and its own filed risk disclosure point different ways.
- Flat departures with services revenue up 32% means the growth is coming from deferred maintenance and material availability rather than from flying, which is a catch-up rather than a rate.
What we still do not know
- Whether LEAP service margins reach the rest of the service business by 2028. Only management's word says so.
- What the $11.75B castings purchase earns. Management promises a return of at least 10% on it by year five.
The evidence under this - 2 claims
C09management claimmedium confidence
Management says three things are compressing margin - growth in installed engines sold at low margin, LEAP service margins below the services portfolio, and GE9X losses - and expects LEAP service margins in line with the total services portfolio by 2028, GE9X losses to peak by 2028, and margin expansion for the company from 2028 onwards.
against this
- None of it appears in a filing. GE publishes no margin by engine programme, no LEAP services margin and no GE9X loss figure, so there is nothing to check the 2028 turn against and nothing to notice if it slips.
- 2028 is two years beyond the guidance horizon. The same management declined to raise guidance in April 2026 on a strong first quarter, citing uncertainty it could not see through one quarter ahead.
- The chief financial officer also said the external channel will take about 30% of LEAP services by 2030. A third of the work moving to third-party shops is a margin mix change running the other way, and GE publishes no attach rate that would let a reader weigh the two.
- The company has said LEAP services broke even only in 2024, so the starting point of the recovery is recent and the slope is entirely asserted.
C16facthigh confidence
GE Aerospace agreed on 8 September 2026 to acquire Consolidated Precision Products for $11.75B - a castings maker with about $2.0B of expected 2027 revenue - valuing it at about 26 times expected 2027 earnings before interest, tax, depreciation and amortisation before roughly $200M of net synergies and about 18 times after, closing in the second half of 2027, financed with existing cash and new debt, and reaching a double-digit return on invested capital by year five.
sourceGE Aerospace investor presentation on the CPP acquisition,…primaryGE Aerospace press release on the CPP acquisition, Exhibit…primary
against this
- The $2.0B revenue, the $200M of synergies and the year-five return are GE's own projections in its own deal deck. Nothing about them is filed or audited, and no pro forma financial statement for the target exists yet.
- The accretion claim is stated after excluding one-time costs and deal-related amortisation, which is to say it is accretion to a measure that removes most of what an acquisition costs.
- 26 times profit before synergies is close to GE's own enterprise value of 28.4 times trailing profit before depreciation, so GE is paying roughly its own multiple for a foundry - and the shares fell 2.8% the session after the announcement.
- It does not close for a year. Every number in it is a 2027 estimate made in 2026, and GE has no post-separation record of integrating a purchase this size.
What would change our view
- Neutral→AttractiveServices convert at a price that is not thirty years out
It needs all of:
- ○Commercial service sales keep growing above 10%, LEAP service margins catch up by the end of 2028, and GE9X losses peak in 2028.checked at the next results, due in Jan 2027
- ○The shares cost about 22 times the free cash guided for 2026, a 4.5% yield.about $192.74 today, 41% below the last close
- Neutral→UnattractiveSomeone else supplies the parts
It needs any of:
- ○Approved outside parts or independent shops take a visible share of overhauls on GE engines.watched as it happens
- ○The old insurance business needs fresh capital from the aerospace business.watched as it happens
We would also be wrong if
- Commercial service growth falls below 10% for two quarters running with no supply explanation.
What is coming
- January 2027 Q4 2026 results and 2027 guidance: Whether 2026 lands inside the raised guide and whether the 2027 outlook keeps the margin recovery on management's 2028 timetable.
Every dated event ahead
- January 2027 Q4 2026 results and 2027 guidance: Whether 2026 lands inside the raised guide and whether the 2027 outlook keeps the margin recovery on management's 2028 timetable.
- December 2027 CPP acquisition closes: Whether the $11.75B castings purchase closes on its terms and how much new debt it takes, the first test of capital allocation as a standalone company.
Since we wrote this
Written
11 Sep
Price the thesis read
$324.15
10 Sep
- 21 OctEarningsThe call explained the cash fall and gave a 2027 outlookManagement put the cash fall down to billing timing, said late spare-parts shipments rose again, and guided 2027 services up low double digits. The view held.
- 20 OctEarningsSales up 18%, forecast raised again, cash flow fell 14%The print beat the revenue and margin marks, but falling free cash flow was a pressure mark, so the view held at Neutral.
- 5 OctThesis reviewThe long case now sits under the verdictThe owner asked to pilot the long case on five theses without a bet before deciding on the rest.
- 4 OctThesis reviewOwner's checklist: revenue streams, cost of growth, management, catalystsThe owner's checklist found the method silent on who runs the company, what growth costs, where the money comes from and what is dated ahead; this pass fills those four blocks from the proxy and filings.
- 11 SepThesis writtenNeutral, medium convictionOne of the best businesses in industry, at a price that already pays for a margin recovery management dates to 2028 and no filing carries.
Also checked 5 times with nothing new to act on.
Sources 23
Where this came from
Sources - 23
Every claim above cites one of these, or states the reasoning that derived it. The quote is frozen at the date it was read: a link can rot, and an agent fetch returns a reading of a page rather than the page. Backs counts the whole claim ledger, so it can name a claim this page does not surface.
- S01primarycompany filing2026-01-29the installed base and the 70% aftermarket share, the segment split, the Competition section naming no company, the CFM International joint-venture structure, the run-off insurance description, the research and development split, and the absence of any disclosed customer concentrationbacksC01C02C14C19C20C22C34C35C40C46C47
- S02primarycompany filing2026-07-16remaining performance obligation and its cancellation definition, borrowings and liquidity, the share count and buybacks, insurance liabilities of $36.20B, the Corporate & Other reconciliation that explains the segment shortfall, and the tariff refundbacksC06C14C30C31C37C48C49
- S03primarycompany filing2026-07-16the quarter's revenue, operating profit and margin by segment, the raised full-year guidance on every line, and the adjusted net income reconciliation showing GAAP earnings per share above the adjusted figurebacksC06C07C08C15C18C32C33C41
- S04primarytranscript2026-07-16the three named causes of margin compression and the 2028 dates attached to them; the LEAP shop-visit and external-channel paths; the CFM56 and GE90 shop-visit runway; delinquencies and shop capacity; sixteen analyst turns from eleven analysts, of which the questions are a separate origin from the answers
Our external channel has gone from sub 10% of our overall LEAP services portfolio to call it mid-teens right now, and we expect that to grow to, say, 30% by the time we get to 2030. || When you look at the CFM56, even obviously the legacy narrow body platform, it's still a relatively young fleet, and we'd argue with a lot of life left in it. There are fewer long-term service agreements on those engines than we would see in the wide body segment. 30% of that fleet hasn't seen the first shop visit. 2/3 haven't even seen the second shop visit. || you look at the GE90, for example, 70% of that installed base has yet to see shop visit two, which has a significant step up in work scope. || Overall, the CFM56 work scopes should remain stable from now till 2028, 2029, because there's hardly any used material in the market, the retirements are low. || First-half departures were roughly flat, but we have not observed any changes in customer behavior. We expect a gradual return to modest departures growth in the second half.
backsC09C21C22C23C27C33C37C39 - S05primarycompany filing2026-01-22the 2025 statement of operations including the insurance revenue line, full-year adjusted revenue of $42.32B, operating profit of $9.1B, adjusted earnings per share of $6.37 and free cash flow of $7.7B - the base every second-half comparison in this thesis is struck againstread, but no claim rests on it
- S06primarycompany filing2026-09-08the $11.75B price, about $2.0B of 2027 expected revenue, about 26 times 2027 profit before synergies and 18 times after, roughly $200M of net synergies, the second-half-2027 close and the year-five return promisebacksC16
- S07primarycompany filing2026-09-08the sellers (Warburg Pincus and Berkshire Partners), CPP's description as one of the world's largest producers of investment and precision sand castings, and the fifteen-year supply relationshipbacksC16
- S08primarycompany filing2025-12-22HEICO Corporation Form 10-K for the year ended 31 October 2025 HEICO Corporationthe attacker's own statement that the three engine makers have been the sole source of substantially all replacement parts for their engines, the roughly 20,000 approvals it holds, the 400 to 550 a year it adds, and its description of the approval process as a barrier to entrybacksC03C04
- S09primarycompany filing2026-02-26StandardAero, Inc. Form 10-K for the year ended 31 December 2025 StandardAero, Inc.the largest independent overhaul company's statement that it works under licence from the engine makers, pays authorisation fees and in some cases annual fees and royalties, was the first independent LEAP Premier MRO in the Americas, and treats loss of an authorisation as a principal riskbacksC05
- S10primarycompany filing2026-02-06RTX Corporation Form 10-K for the year ended 31 December 2025 RTX Corporationa rival engine maker's description of the same product and aftermarket, Airbus at 29% of Pratt & Whitney segment sales, the Pratt & Whitney backlog of $151B within RTX's $268B, and the statement that customers may buy parts from suppliers other than the original equipment makerbacksC28C29
- S11primaryindustry data2026-07-18Boeing 2026 Commercial Market Outlook, company news release The Boeing Companythe base for the prize, counted in aircraft by an airframer rather than by GE, and the forward traffic rate in machine.current
Boeing released its 2026 Commercial Market Outlook (CMO), forecasting that operators will need nearly 44,000 new airplanes to support sustained air travel demand and air cargo expansion over the next 20 years. The global commercial airplane fleet is expected to grow nearly 80% to more than 50,000 airplanes by 2045 as airlines and cargo operators add capacity... Passenger traffic is expected to grow 4% annually, resulting in a doubling of global air traffic between 2026 and 2045.
backsC24 - S12primaryindustry data2026-07-18Boeing 2026 Services Market Outlook and Pilot & Technician Outlook, company news release The Boeing Companythe bound on the prize, and the technician constraint - 728,000 maintenance technicians needed through 2045 - that limits how much of it can be billed
Boeing projects $4.9 trillion aviation services market and demand for more than 2.4 million commercial aviation professionals through 2045... Over the next two decades, Boeing forecasts a $4.9 trillion support and services market, alongside a demand for over 2.4 million new commercial aviation professionals... 674,000 pilots 728,000 maintenance technicians 1,023,000 cabin crew members
backsC25 - S13primarygovernment data2026-09-11a measured air travel series from outside the aviation industry, showing 2023 still 4.2% below 2019 and no data published after 2023
2023: 4268984474.03796 Air transport, passengers carried; 2019: 4455690101.02828 Air transport, passengers carried
backsC26 - S14primaryvendor data2026-09-11GE research pack, frozen at content/GE/research-pack.jsoncontent/GE/research-pack.jsonprice, market value and enterprise value, the 20-day range and 252-day return, the analyst split, eight quarters of earnings history with the filed GAAP earnings per share beside the adjusted, FINRA short interest, insider filings in aggregate, and the valuation_cross_check and errors blocksbacksC20C32C36C38
- S15primarycompany filing2026-01-30The Boeing Company Form 10-K for the year ended 31 December 2025 The Boeing Companya customer's own order book on a comparable definition - Commercial Airplanes backlog of $567.29B at 31 December 2025 against $435.18B a year earlier, with $11.09B of 2025 cancellations disclosed, which GE's equivalent disclosure does not carryread, but no claim rests on it
- S16primarycompany filing2026-08-12the transaction codes behind one of the sales the pack reports in aggregate: code M, an exercise of 10,242 fully vested options at $36.65, immediately before code S sales of 5,344 and 4,898 shares at about $370backsC36
- S17primarycompany filing2026-07-28the same pattern on a second filer: exercises at $69.55 and $90.01 on options expiring in 2027 and 2028, each immediately followed by sales at about $354backsC36
- S18secondarynews2026-09-11News digest, GE, grouped key developmentsdata/cache/news/GE.jsonthe IndiGo memorandum for more than 1,000 LEAP-1A engines announced at Farnborough, and the measured price reaction to the CPP announcement - down 2.8% the session after
IndiGo and CFM sign MOU paving the way to a record agreement for 1,000+ LEAP-1A engines
backsC42 - S20primarycompany filing2026-09-11that GE has tagged no consolidated operating income for more than a decade, which is why its headline profit measure has no GAAP line beneath it and why the pack's vs_filings comparison matched a 2012 conglomerate figure against a 2025 aerospace one
44 facts in USD, the most recent covering 2014-04-01 to 2014-06-30, value 5,869,000,000, form 10-Q, filed 2014-07-31
backsC18 - S21primarycompany filing2026-03-12beneficial ownership at 31 December 2025, the named executives' roles and tenure, the 2025 annual bonus metrics and payout, the PSU design and the 2023 PSU vestingbacksC43C44C45
- S22primarycompany filing2026-10-20remaining performance obligation of $212.08B at 30 September 2026 by segment, internal shop visit revenue growth of 12% in the quarter and 23% for nine months, services and equipment revenue, and the cash flow bridgebacksC10
- S23primarycompany filing2026-10-20the raised 2026 guidance, quarterly adjusted revenue, operating profit, adjusted EPS and free cash flow, and the segment resultsbacksC11
- S24primarytranscript2026-10-20why Q3 free cash flow fell (receivables and airframer balances), spare-parts delinquency up again, CFM56 retirement and shop-visit expectations, the 2027 outlook (services, DPT, GE9X headwind, margins), and ten analysts' questions
Delinquency is up slightly, even though material availability continues to get better, and we are seeing good flow-through from that just given the strong demand, the backlog and the delinquency grew in the quarter.
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