General Electric Company (GE) | Investment Case

1. Company Snapshot

1.a. Company Description

General Electric Company, doing business as GE Aerospace, designs and produces commercial and defense aircraft engines, integrated engine components, electric power, and mechanical aircraft systems.It also offers aftermarket services to support its products.The company operates in the United States, Europe, China, Asia, the Americas, the Middle East, and Africa.

General Electric Company was incorporated in 1892 and is based in Evendale, Ohio.

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1.b. Last Insights on GE

GE Aerospace's recent performance was driven by strong Q4 2025 results, with adjusted EPS of $1.57 exceeding estimates by 10%. Revenue surged 20% to $11.9 billion, fueled by 31% growth in services and record LEAP engine deliveries. The company's robust outlook, with expectations for continued revenue growth, has bolstered investor confidence. Additionally, GE's history of beating earnings estimates, with 12 consecutive quarterly beats, has contributed to its positive momentum.

1.c. Company Highlights

Last Price	308.16
Change Percentage	-0.18%
Open	309.88
Previous Close	308.71
Market Cap ( Millions)	325051
Volume	2856991
Year High	332.79
Year Low	159.36
M A 50	304.18
M A 200	274.6

FCF Yield	2.23%
Dividend Yield	0.47%
ROE	45.88%
Debt / Equity	109.73%
Net Debt / EBIDTA	67.16%
Price To Book	17.6
Price Earnings Ratio	37.78
Price To FCF	44.75
Price To sales	7.08
EV / EBITDA	27.62

2. GE Aerospace's Strong Q4 and Full Year 2025 Results Exceed Expectations

GE Aerospace reported a robust fourth quarter and full year 2025, with significant improvements across key metrics. The company's fourth quarter saw orders up 74%, revenue up 20%, and EPS up 19% to $1.57, beating analyst estimates of $1.43. For the full year, orders were up 32%, revenue increased 21%, operating profit grew $1.8 billion, and free cash flow was up $1.5 billion. The company's strong performance was highlighted by CEO Larry Culp's emphasis on the company's purpose-driven culture and commitment to customer-driven innovation.

Publication Date: Jan -23

                                    📋 Highlights
                                    Fourth Quarter 2025 Performance::
                                                Orders surged 74%, revenue rose 20%, EPS climbed 19% to $1.57, and free cash flow grew 15%.
Full-Year 2025 Highlights::
                                                Orders increased 32%, revenue jumped 21%, operating profit hit $1.8B, and free cash flow rose $1.5B.
2026 Guidance::
                                                Revenue growth of low double digits, EPS of $7.10–$7.40 (up ~15% at midpoint), and $8–8.4B in free cash flow.
Backlog Strength::
                                                Commercial services backlog reached $190B, up $20B YoY, driven by robust demand for narrow-body engines like LEAP.
LEAP Engine Momentum::
                                                Turnaround times improved 10%, supply chain visibility enhanced, with LEAP expected to drive profitability and aftermarket growth in 2026.

                                

Guidance and Outlook

GE Aerospace expects 2026 revenue to be up low double digits, with commercial services up mid-teens, and EPS of $7.10 to $7.40, up nearly 15% at the midpoint. The company also expects to generate $8 billion to $8.4 billion of free cash flow. The company's backlog grew to roughly $190 billion, up nearly $20 billion over the last year, providing a strong foundation for future growth. CFO Rahul Ghai emphasized the company's solid growth prospects, driven by investments in capacity expansion, technology, and operations.

Segment Performance and Margin Expectations

The commercial aftermarket backdrop is strong, with a $190 billion backlog and tailwinds continuing from 2025. Services growth guidance for 2026 is mid-teens, driven by shop visits and spare parts growth, with a focus on narrow-body engines, particularly LEAP. Margins in Commercial Engines and Services (CES) are expected to be flat in 2026, despite strong services growth, due to headwinds from the GE9X and mix issues. However, the company expects to overcome these headwinds with growth in LEAP OE and aftermarket profitability.

Valuation and Cash Flow

With a P/E Ratio of 39.04 and EV/EBITDA of 28.02, the company's valuation multiples suggest that the market is pricing in significant growth expectations. The company's free cash flow yield is 2.09%, indicating a reasonable return for investors. The company's ROIC of 32.28% and ROE of 42.13% demonstrate its ability to generate strong returns on capital and equity. Analysts estimate next year's revenue growth at 10.2%, which is slightly lower than the company's guidance, suggesting that the company's growth prospects are reasonably priced in.

3. NewsRoom

The Big 3: GE, WMT, COF

Feb -02

Source: youtube.com

Current Chemicals Launches as Independent Specialty Materials Manufacturer, Building on 75-Year GE Legacy with Backing from Momentum Global Ventures

Feb -02

Source: businesswire.com

GE Appliances Recognized as the #1 Most Reliable Appliance Brand in the J.D. Power 2025 U.S. Appliance Reliability & Service Study

Jan -30

Source: businesswire.com

Chris Hohn’s Hedge Fund Had an Incredible 2025. These Top Holdings Crushed the SPY

Jan -29

Source: 247wallst.com

The Market Is Wrong to Sell Off GE Aerospace Stock After the Latest Update: Here's Why

Jan -28

Source: fool.com

Built for America: GE Appliances Announces First-ever Water Filter Manufacturing at Its Louisville, Kentucky Headquarters

Jan -28

Source: businesswire.com

GE Aerospace: The Pros And Cons Of Investing In The Stock Right Now

Jan -27

Source: seekingalpha.com

The New World Order Isn't A Theory - It's How I'm Investing

Jan -24

Source: seekingalpha.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (7.27%)

6. Segments

Commercial Engines & Services

Expected Growth: 8.0%

The 8.0% growth in Commercial Engines & Services at General Electric Company is driven by increasing demand for air travel, fleet expansion, and aftermarket services. The segment benefits from GE's strong position in the commercial aviation industry, with a large installed base and a robust backlog of orders. Services growth is fueled by digital transformation and predictive maintenance solutions.

Defense & Propulsion Technologies

Expected Growth: 6.0%

GE's Defense & Propulsion Technologies growth of 6.0% is driven by increasing demand for advanced military technologies, rising government defense spending, and the company's strong portfolio of innovative solutions, including hypersonic systems, advanced materials, and digital transformation initiatives.

Corporate & Other

Expected Growth: 4.0%

The 4.0 growth in Corporate & Other segment of General Electric Company is driven by increased investments in renewable energy, strong performance in aviation and healthcare sectors, and benefits from cost-saving initiatives and restructuring efforts, leading to improved profitability and competitiveness.

7. Detailed Products

GE Healthcare Medical Imaging

Medical imaging technologies such as MRI, CT, and PET scanners for diagnostic purposes

GE Healthcare Patient Monitoring

Patient monitoring systems and solutions for tracking vital signs and health metrics

GE Renewable Energy Wind Turbines

Wind turbines for renewable energy generation

GE Renewable Energy Solar Energy Systems

Solar energy systems for renewable energy generation

GE Power Gas Turbines

Gas turbines for power generation and industrial applications

GE Power Steam Turbines

Steam turbines for power generation and industrial applications

GE Aviation Jet Engines

Jet engines for commercial and military aircraft

GE Transportation Locomotives

Locomotives for rail transportation

GE Appliances Home Appliances

Home appliances such as refrigerators, washing machines, and air conditioners

8. General Electric Company's Porter Forces

Forces Ranking

Threat Of Substitutes

General Electric Company operates in various industries, including aviation, healthcare, and energy. While there are substitutes available for some of its products and services, the company's diversified portfolio and strong brand reputation reduce the threat of substitutes. However, emerging technologies and innovative solutions from competitors could potentially increase the threat level.

Bargaining Power Of Customers

General Electric Company has a large and diverse customer base across various industries. While some customers may have significant bargaining power, the company's scale and market presence enable it to maintain a relatively strong position in negotiations. Additionally, GE's products and services are often critical to its customers' operations, reducing their bargaining power.

Bargaining Power Of Suppliers

General Electric Company has a large and diversified supply chain, which reduces its dependence on individual suppliers. However, some suppliers may have significant bargaining power due to the high demand for their products or services. GE's scale and market presence enable it to negotiate favorable terms with suppliers, but it may face some pressure from suppliers in certain industries.

Threat Of New Entrants

General Electric Company operates in industries with high barriers to entry, such as aviation and healthcare. The company's strong brand reputation, significant R&D investments, and established relationships with customers and suppliers make it difficult for new entrants to compete. Additionally, regulatory requirements and industry standards create additional hurdles for new entrants.

Intensity Of Rivalry

General Electric Company operates in highly competitive industries, including aviation, healthcare, and energy. The company faces significant competition from established players, such as Boeing, Siemens, and Philips, as well as emerging players from Asia. The competitive landscape is characterized by intense pricing pressure, significant R&D investments, and a high level of innovation.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	49.91%
Debt Cost	5.86%
Equity Weight	50.09%
Equity Cost	10.61%
WACC	8.24%
Leverage	99.64%

11. Quality Control: General Electric Company passed 3 out of 9 key points

Strong Liquidity

Low Deb

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Northrop Grumman

A-Score: 6.2/10

Value: 3.6

Growth: 5.9

Quality: 6.4

Yield: 3.0

Momentum: 9.0

Volatility: 9.0

1-Year Total Return ->

L3Harris

A-Score: 6.0/10

Value: 2.8

Growth: 5.6

Quality: 5.4

Yield: 4.0

Momentum: 8.5

Volatility: 9.7

1-Year Total Return ->

Raytheon Technologies

A-Score: 5.5/10

Value: 2.3

Growth: 3.4

Quality: 5.0

Yield: 4.0

Momentum: 9.5

Volatility: 8.7

1-Year Total Return ->

HEICO

A-Score: 5.4/10

Value: 0.4

Growth: 8.4

Quality: 6.9

Yield: 0.0

Momentum: 8.0

Volatility: 8.3

1-Year Total Return ->

Lockheed Martin

A-Score: 5.1/10

Value: 2.8

Growth: 5.1

Quality: 4.5

Yield: 6.0

Momentum: 3.0

Volatility: 9.3

1-Year Total Return ->

A-Score: 4.8/10

Value: 0.7

Growth: 3.4

Quality: 6.8

Yield: 0.0

Momentum: 9.5

Volatility: 8.3

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

15.32%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

8.24%

General Electric Company - US3696043013

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on GE

1.c. Company Highlights

Expensive

Strong Momentum

Average Growth

Earnings Beats

Revenues Beats

Lower Growth

Revenues Miss

Stable Momentum

Average Quality

Better Quality

Less Volatile

2. GE Aerospace's Strong Q4 and Full Year 2025 Results Exceed Expectations

Guidance and Outlook

Segment Performance and Margin Expectations

Valuation and Cash Flow

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (7.27%)

6. Segments

Commercial Engines & Services

Expected Growth: 8.0%

Defense & Propulsion Technologies

Expected Growth: 6.0%

Corporate & Other

Expected Growth: 4.0%

7. Detailed Products

GE Healthcare Medical Imaging

GE Healthcare Patient Monitoring

GE Renewable Energy Wind Turbines

GE Renewable Energy Solar Energy Systems

GE Power Gas Turbines

GE Power Steam Turbines

GE Aviation Jet Engines

GE Transportation Locomotives

GE Appliances Home Appliances

8. General Electric Company's Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: General Electric Company passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

308.14$

Current Price

308.14$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA