GE Aerospace: Analysts Say New Highs Are Coming

Core Viewpoint - GE Aerospace is positioned as a compelling turnaround story for 2025, focusing on its core strength in building airplane engines and servicing the aerospace industry, with expectations of hitting new highs soon [1]. Financial Performance - GE Aerospace reported $9 billion in revenue for Q1, achieving 11% top-line growth, leading its industry despite a slight miss compared to consensus estimates [4]. - The company widened its profit and operating profit margins, with the operating margin increasing by 460 basis points, resulting in adjusted earnings of $1.49, which is nearly 25% higher than analysts' forecasts and a 60% increase year-over-year [7]. - The company reaffirmed its guidance for low double-digit revenue growth and approximately $5.27 in adjusted EPS, with long-term forecasts projecting revenue growth in the low teens and earnings growth in the high teens through the end of the decade [8]. Market Sentiment and Analyst Ratings - Analysts have shifted sentiment to a Buy rating from Hold, with a rising price target forecasting a 15% upside from critical support levels [2]. - The current stock price is $193.71, with a 12-month price forecast of $216.15, indicating an 11.59% upside based on 12 analyst ratings [9]. Capital Return and Shareholder Value - GE Aerospace's capital return is expected to grow in 2025, including dividends and share repurchases, with a dividend yield of 0.74% and a payout ratio of about 25% of the 2025 EPS outlook [9]. - The company reduced its share count by 1.9% year-over-year in Q1, indicating a commitment to returning value to shareholders [9]. Institutional Activity - Institutional ownership stands at 75%, with net activity reaching a multi-year high in Q1, showing a balanced buying and selling trend, but shifting in favor of bulls in Q2 [10].