GE Aerospace (GE): A Bull Case Theory

We came across a bullish thesis on GE Aerospace (GE) on Aria Radnia’s YouTube Channel. In this article, we will summarize the bulls’ thesis on GE. GE Aerospace (GE)’s share was trading at $327.23 as of January 13th. GE’s trailing and forward P/E were 43.75 and 45.66 respectively according to Yahoo Finance.

General Electric today is a fundamentally different company from its historical incarnation, having fully divested its legacy consumer and industrial businesses through spin-offs and asset sales. The GE that trades under the current ticker is now a pure-play aerospace and defense company, with a core focus on jet engine manufacturing.

While jet engines are often viewed as cyclical due to the sensitivity of air travel to economic conditions, this framing overlooks the true earnings engine of the business. Approximately 70% of GE’s revenue is generated from MRO, or maintenance, repair, and overhaul services, which operate under long-term, subscription-style contracts with airlines.

These agreements function more like insurance than transactional services, with airlines making recurring payments to ensure engines are continuously monitored, serviced, and repaired, regardless of short-term fluctuations in flight activity. In many cases, airlines have limited flexibility, as specific aircraft models come bundled with GE engines, effectively locking customers into these high-margin service contracts for the life of the plane.

The remaining ~30% of revenue comes from jet engine hardware sales, which contribute little to profitability as engines are often sold near breakeven. Nearly 100% of GE’s operating income is derived from its aftermarket services tied to the installed engine base.

Even during economic slowdowns, airlines are unlikely to cancel aircraft orders outright, as doing so would place them at the back of long production backlogs once demand recovers. Instead, they typically preserve fleet plans and absorb temporary pressure.

As long as planes remain in service, maintenance contracts continue to generate steady cash flow, and in many cases payments persist even when aircraft are grounded. This structure gives GE a durable revenue and free cash flow profile that is far more resilient than a traditional cyclical manufacturer, underpinning its positioning as a high-quality, recurring-revenue aerospace business.

Previously, we covered a bullish thesis on GE Aerospace (GE) by Asymmetric Ventures in May 2025, which highlighted the company’s dominant MRO business, recurring Power-by-the-Hour contracts, and durable competitive advantages. GE’s stock price has appreciated by approximately 35.34% since our coverage. This is because the thesis played out as GE’s aftermarket-driven cash flows proved resilient. Aria Radnia shares a similar view but emphasizes the insurance-like subscription economics of MRO and GE’s transformation into a pure-play aerospace business.

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Disclosure: None.