Has GE Aerospace Stock Become A Different Bet?
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GE Aerospace (GE) stock trades at 36.5 times its earnings over the last twelve months, against 22.8 for the S&P 500. Holders paying that premium need to know what they own. On its fiscal Q2 2025 call, management said 70% of total revenue came from recurring, predictable and highly profitable services. That call doubled as the company’s 2025 investor update. Management no longer emphasizes that figure, though it still calls services the heart of the business. So what else is management talking up?
GE Aerospace Now Talks Up Building More Engines
Management made the case for building more engines during its fiscal Q3 2026 call, held October 20, 2026. The company agreed to acquire CPP, a long-term supplier, in what management called a significant investment to build capacity for castings. Management also expects the installed base of the LEAP engine to more than double between 2025 and 2030, and it has reworked its LEAP fan assembly line to raise capacity.
This production push matches the demand management described. Equipment orders in the commercial engines business more than tripled in the quarter, management said.
How Fast Are New Engines Growing Next To Services?
In fiscal Q3 2026, management said equipment revenue, which covers new engines, grew 38%, more than twice the 17% growth reported in services. Both sit in GE Aerospace’s Commercial Engines & Services segment, which brought in $33.3 billion in fiscal 2025, or 72.7% of company revenue.
While engines sold today return for service in later years, the newer LEAP engines bring in less service revenue for now. Management said LEAP shop visit revenue per visit is about half that of the older CFM56 engine because the LEAP fleet is early in its life.
Is GE Aerospace’s Engine Push Reassuring For Holders?
For a holder, the push toward new engines reads as more reassuring than concerning, because services are still growing. Management said on the fiscal Q3 2026 call that it is positioned for low double-digit growth in commercial services in 2027. That pace would be slower than the 17% services growth in fiscal Q3 2026.
The cost is expected to show up in profit. Management expects new engines to hold back part of GE Aerospace’s profit growth in 2027, and its adjusted margins to stay in line with 2026. Even so, management said it expects strong profit growth next year, driven by services and its defense and propulsion business. Separately, GE Aerospace’s reported operating margin over the last twelve months was 18.2%, down from 20.5% a year earlier.
GE Aerospace is expected to report in January 2027, when management plans to give its full outlook for 2027. Commercial services growth in that outlook is the number to watch. For holders paying 36.5 times earnings, the bet still rests mainly on services.
Beyond GE: A Systematic Way To Invest
Before you decide on GE, consider a better choice. Since its September 2020 launch, the Trefis High Quality (HQ) Portfolio has returned 105%, ahead of a benchmark that combines the S&P 500, S&P MidCap and Russell 2000, without betting on one stock.
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