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GE Aerospace
Industrials · Aerospace & Defense
Aftermarket-heavy aerospace franchise. ~70% of operating profit from services on installed base of ~44,000 commercial + ~26,000 military engines. LEAP narrow-body cycle still in early-mid shop-visit ramp.
- LEAP installed base ~3,500+ engines, first-overhaul wave 2026-2030 = recurring service revenue compounder
- GE9X monopoly on $787 successor wide-body class; backlog stretches into 2030s
- Aftermarket margins 25-30% vs OE near breakeven; mix shifts structurally up as fleet ages
- Defense leg ($F110, $XA100 6th-gen) optionality on NGAD + F-15EX
- Net cash balance sheet post-split, $7-8B/yr FCF guide
- LEAP-1A durability issues (HPT blade premature distress) drove unscheduled removals in 2024-25, denting near-term shop visit cadence and customer trust
- Narrow-body OE production tied to $BA + $AIR rates; any MAX/neo slowdown defers engine deliveries
- Cyclical exposure to global air traffic ($ASK growth); 2-3yr lag to any travel downturn
- Competition from $RTX Pratt GTF on A320neo and Rolls-Royce on wide-body re-engining
- Valuation ~35x fwd P/E embeds smooth services ramp; any LEAP fix slip compresses multiple
No major news in the last 7 days for GE - only listicles and opinion pieces, which we filter out by default. See everything anyway.