GE Aerospace Margin Widens: Is It Time to Buy Dip?

Core Viewpoint - General Electric (GE) presents a potential buying opportunity following a recent price correction, attributed to improved operational quality and a strong position in the aerospace industry [1][2]. Financial Performance - GE Aerospace reported a solid Q3 with a 6% growth across both segments, although it missed analyst expectations by 440 basis points [2]. - The defense segment grew by 2%, while the commercial segment saw an 8% growth, which was below expectations [2]. - New orders increased by 28%, indicating potential for accelerated growth in upcoming quarters [2]. Margin and Cash Flow - The adjusted operating profit margin improved by 150 basis points, contributing to a leveraged 14% profit growth [3]. - Free cash flow rose by 5% to $1.80 billion, supporting balance sheet health and share buybacks [3]. - The company raised its full-year EPS guidance for the third time this year to a range of $4.20 to $4.35, surpassing consensus estimates [3]. Analyst Sentiment - Analysts maintain a positive outlook on GE Aerospace, with a consensus rating of "Moderate Buy" and price targets suggesting a potential upside of 12.4% [4]. - The stock's price target is projected to reach between $225 and $235, indicating a possible 15% gain [4]. Institutional Activity - Institutional investors own over 70% of GE stock and have consistently bought shares each quarter in 2024, reflecting support for the company's restructuring into three publicly traded entities [5]. Technical Outlook - The recent price pullback is viewed as an entry point for new investments, with critical support targets around $172 [6]. - A deeper decline could occur if the stock falls below this support level, with potential targets near $150 and $160 [6].