4. GE Aerospace (NYSE:GE)
Number of Hedge Fund Holders: 101
GE Aerospace (NYSE:GE) is a global aerospace propulsion, services, and systems leader. The company has been tagged as a dominant player in the broader aerospace industry, primarily in engine manufacturing, thanks to its historical leadership, strategic partnerships, and technological investments. The company’s healthy market position, mainly in narrowbody jets and aftermarket services, continues to bolster its market position. Sheila Kahyaoglu, an analyst from Jefferies, maintained a “Buy” rating on GE Aerospace (NYSE:GE)’s stock, and the associated price target remained same at $240.00.
The analyst’s rating is backed by GE Aerospace (NYSE:GE)’s healthy financial performance and strategic management decisions. It has exhibited resilience by maintaining its profit guidance for 2025. This was seen due to effective cost controls and price surcharges, demonstrating the company’s ability to navigate economic challenges. For FY 2025, the company expects low double-digit adjusted revenue growth, operating profit of $7.8 billion – $8.2 billion, adjusted EPS of $5.10 – $5.45, and FCF of $6.3 billion – $6.8 billion. GE Aerospace (NYSE:GE)’s backlog and growth in services continue to support the positive outlook. The company has a commercial services backlog of over $140 billion. It saw continued demand for its services and products. At Commercial Engines & Services (CES), it secured a significant engine commitment from ANA for over 75 LEAP engines to power their fleet of 13 Airbus A321neo and up to 22 Boeing 737 MAX aircraft.
Aristotle Atlantic Partners, LLC, an investment advisor, published its Q4 2024 investor letter. Here is what the fund said:
“GE Aerospace (NYSE:GE) designs and produces commercial and defense aircraft engines, integrated engine components, electric power, and mechanical aircraft systems. The industry has high entry barriers and is concentrated among few players. Despite its cyclical nature, the demand for travel is driven by global middle-class growth. Boeing and Airbus have long order books, ensuring steady demand for engines and spare parts. The company also benefits from high-margin services for existing aircraft fleets, with services accounting for 70% of its commercial engine business. GE Aerospace serves customers worldwide.
We see GE Aerospace making significant strides in its commercial engine business, which is expected to boost future services revenue growth. Over the past five years, the company has undergone substantial restructuring and simplification, including divesting its healthcare and energy businesses. The company now operates in three segments: Commercial Engines & Services (CES), Defense & Propulsion Technologies (DPT) and Insurance. Long-term revenue guidance is for high single-digit growth, and management has a goal of $10 billion in annual operating profit by 2028, with an expected 20% annual earnings growth. Following years of restructuring, we see GE Aerospace now positioned to return capital to shareholders through dividends and share repurchases.”
