VALUATION HIGHLIGHTS

1. Commercial Engines & Services constitute 81% of the Trefis price estimate for General Electric's stock.
2. Defense & Propulsion Technologies constitute 14% of the Trefis price estimate for General Electric's stock.

WHAT HAS CHANGED?

Latest Earnings: Second Quarter Fiscal 2026

GE Aerospace reported total GAAP revenue of $13.3 billion, a 21% increase year-over-year, and adjusted revenue of $12.6 billion, growing 24% from the prior-year period. Non-GAAP adjusted diluted earnings per share came in at $2.02, up 22% year-over-year, beating market forecasts of $1.86. The strong performance was primarily driven by robust commercial services expansion and record internal shop visit output, which grew 25%, helping offset a 130 basis point contraction in adjusted operating profit margin due to engine delivery mix and inflation.

Note: GE Aerospace's FY'25 ended on December 31, 2025. Q2 FY'26 ended on June 30, 2026.

Full-Year Guidance Raised Following Commercial Momentum

Supported by robust commercial execution, management raised its full-year 2026 adjusted operating profit target to a range of $10.25 billion to $10.35 billion for its Commercial Engines and Services business, boosting total expected earnings alongside free cash flow now anticipated between $8.0 billion and $8.4 billion.

POTENTIAL UPSIDE & DOWNSIDE TO TREFIS PRICE

Below are key drivers of GE Aerospace's value that present opportunities for upside or downside to the current Trefis price estimate:

Commercial Engines and Services

• Shop Visit Performance: Higher global flight departures and older widebody maintenance requirements drove commercial services revenue up 26%. If shop visit volume maintains this rhythm, it will provide substantial upside to aftermarket services high-margin projections compared to baseline Trefis models.
• Installed Engine Mix Pressures: Accelerated production of newer installation engines, including LEAP unit volumes increasing 24%, creates near-term margin pressure. An unexpected shift toward a heavier equipment volume mix vs aftermarket spares poses a downside risk to short-term segment profit margin estimates.

For additional details, select a division from the interactive Trefis split for GE Aerospace at the top of the page.

BUSINESS SUMMARY

GE Aerospace operates as a pure-play propulsion provider, designing, manufacturing, and servicing jet engines, turboprops, integrated components, and advanced mechanical systems for commercial and military aircraft structures globally.

SOURCES OF VALUE

The Commercial Engines and Services business functions as the primary driver of corporate value due to its expansive global fleet footprint and captive high-margin parts lifecycle.

Massive Commercial Aftermarket Backlog

A young and highly active global fleet coupled with a commercial services backlog exceeding $170 billion guarantees highly predictable, long-term recurring revenue from replacement parts and regular overhauls.

Dominant Narrowbody Propulsion Footprint

The widespread market integration of the LEAP engine family across global airline networks establishes a structural competitive moat that limits fleet replacement erosion risks.

KEY TRENDS

Prolonged Aircraft Fleet Service Lifespan

Persistent global new aircraft delivery constraints are forcing commercial airlines to extend the operating life of legacy fleets, accelerating global demand for long-term engine shop overhauls and heavy maintenance.

Capital Allocation Shifts Following Separation

Following the corporate separation of its energy business, management is aggressively deploying internal capital toward structural capacity upgrades, next-generation architecture research, and direct shareholder buybacks.