GE Aerospace's (GE, Financial) stock saw a noteworthy rise, increasing by 2.94% following the recent dip post-earnings announcement. Investors took this opportunity to purchase shares, driving the stock price to $181.85.
GE Aerospace presented a mixed earnings report, highlighting challenges such as revised expectations for LEAP engine deliveries. The company, in partnership with Safran, manufactures the LEAP engine which is crucial for Boeing 737 MAX and as an alternative for the Airbus A320 neo family. Supply chain issues and delivery delays have prompted GE to predict a 10% decline in LEAP deliveries for 2024, a significant shift from the previously anticipated 20%-25% growth.
Despite these hurdles, there were substantial positives reported. Commercial engine orders surged by 29%, and the defense segment saw a 19% increase in the third quarter. The potential increase in the usage of older GE engines, due to delays, could enhance aftermarket revenues. Shop visits for the CFM56 engine, a predecessor to LEAP, are expected to peak in 2025 and maintain high levels until 2027, offering a buffer against future declines in earnings and cash flow.
Analyzing GE's stock (GE, Financial), its current price-to-earnings ratio stands at 43.09, a reflection of market expectations for future growth. The stock's GF Value has been classified as "Significantly Overvalued," with a GF Value estimate of $57, pointing towards caution for potential investors. For details on GE's valuation, visit GF Value.
GE's financial indicators show a high price-to-book ratio of 10.6, nearing its 10-year high, and a modest dividend yield of 0.51%. The company's financial strength is stable with an Altman Z-score in the grey area, indicating some financial stress. However, the stock has shown resilience, with a year-to-date price change of 81.52%, reflecting investor confidence amid market challenges.
