Wednesday, Bernstein analysts at Société Générale raised their price target on GE Aerospace (NYSE:GE) shares to $232.00, up from the previous $209.00, while keeping an Outperform rating on the stock. The adjustment follows GE Aerospace's robust performance in 2024 and the company's strong fourth-quarter results reported last week, which exceeded market expectations. According to InvestingPro data, analyst targets now range from $190 to $261, with the stock currently trading at $194.43. The company has demonstrated remarkable momentum, achieving an impressive 87.18% return over the past year.
GE Aerospace's shares saw a significant 9% increase on the day the earnings were announced, buoyed by the positive financial outlook for 2025 presented by the management. The company's aftermarket services were a focal point during the earnings announcement, especially as investor sentiment had recently shifted away from this area. Despite the change in sentiment, management is now forecasting low double-digit to mid-teens growth for 2025, an upward revision from the earlier low double-digit growth expectations. InvestingPro analysis reveals that 8 analysts have recently revised their earnings estimates upward for the upcoming period, supporting management's optimistic outlook. The company maintains a strong financial health score of GOOD, with a market capitalization of $208.76 billion.
CEO Larry Culp highlighted the continuing high demand for aftermarket services, which currently surpasses what GE can supply, mainly due to a shortage of spare parts that is hampering growth. However, the expectation is that this strong demand will persist for several years, supported by the need for life extensions on older engines, such as the CFM56 and GE90, which will generate more shop visits involving extensive work and higher pricing. The company's robust position is reflected in its financial metrics, with a gross profit margin of 30.92% and a healthy return on equity of 28%.
In response to these developments, Bernstein analysts have increased their 2025 earnings per share (EPS) estimate for GE Aerospace to $5.47, a slight rise from the previous $5.46 prediction and marginally above the upper end of the company's guidance range of $5.10 to $5.45. This revised EPS forecast is based on a modestly improved margin profile for the Commercial Engines and Services (CES) and Defense & Power (DPT) segments, which is somewhat offset by anticipated higher interest and corporate expenses.
The analysts also enhanced their long-term sales and margin outlook for GE Aerospace's CES division, citing a growing backlog of service commitments that have been delayed due to supply constraints. With these factors in mind, the firm's increased price target of $232 reflects confidence in GE Aerospace's continued performance and market position. For investors seeking deeper insights, InvestingPro offers comprehensive analysis with over 30 additional premium insights and a detailed Pro Research Report, available exclusively to subscribers.
In other recent news, GE Aerospace has seen a series of positive analyst outlooks. BofA Securities raised GE Aerospace's stock target to $225, maintaining a Buy rating, reflecting confidence in the company's original equipment and aftermarket services. Ronald J. Epstein, an analyst at BofA, anticipates a strong first half of 2025 for the company's Services business and a significant uptick in equipment deliveries in the latter half of the year.
RBC Capital Markets also adjusted its outlook on GE Aerospace, raising the price target to $220 while maintaining an Outperform rating. This decision came after the company demonstrated robust performance in the fourth quarter of 2024, surpassing expectations with an adjusted earnings per share of $1.32 and revenue of $9.9 billion, a 16% year-over-year growth.
Similarly, Vertical Group increased the stock's price target to $230, maintaining a Buy rating, and Bernstein analysts at SocGen Group reiterated an Outperform rating with a price target of $209. These adjustments suggest a strong aftermarket outlook and increased confidence in GE Aerospace's financial trajectory and market position.
Amid these developments, Boeing Co (NYSE:BA).'s potential sale of its Jeppesen navigation unit has attracted major aviation suppliers and private equity firms, including GE Aerospace. The sale is part of Boeing's strategy to streamline its operations and focus on its core businesses.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.