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Why Jim Cramer thinks GE Aerospace, GE Vernova have more room to run
Youtube· 2025-10-24 00:03
Core Viewpoint - The market initially misjudged the performance of GE Aerospace and GE Vernova, both of which reported strong earnings but experienced stock sell-offs before rebounding significantly. Group 1: GE Aerospace - GE Aerospace reported a remarkable 26% organic revenue growth, driven by strong performance in commercial engines, services, and defense sectors [3][6] - The commercial engines and services segment saw a 22% increase in equipment revenue and a 28% rise in services revenue, leading to a 35% growth in earnings for this division [6][7] - Management raised their full-year revenue growth forecast for commercial engines services from high teens to low 20s, indicating positive momentum [8] - Supply chain improvements were noted, with priority suppliers achieving over 95% of committed volumes for three consecutive quarters, contributing to a 40% year-over-year increase in Leap engine deliveries [9][11] - GE Aerospace is positioned to benefit from increased aircraft purchases due to trade dynamics, as evidenced by Korean Air's order for 103 aircraft that will include GE engines [13][14] Group 2: GE Vernova - GE Vernova reported strong organic revenue growth and a 15% year-over-year increase in backlog, reaching over $135 billion [15][16] - The company secured nearly $15 billion in new orders, reflecting robust demand for its products [15][16] - Management's acquisition of the remaining 50% of Prolle aims to enhance exposure to the electrification segment, which is expected to grow significantly [18][20] - The combined serviceable addressable market for GE Vernova is projected to expand at a 10% compound annual growth rate, potentially doubling by 2030 [20] - The company has repurchased $2.2 billion worth of its own stock this year and plans to continue buybacks, indicating confidence in its stock value [23]
