GE Aerospace reported strong 1Q24 results with revenue growth of 15.5% YoY to $8.1 billion and a profit increase of 15.3% YoY to $1.5 billion. Orders also increased by 34% YoY, with strength in both commercial engines and defense technologies. As a result of these positive results, the company raised its FY24 outlook, expecting revenue growth in the lower double digits and operating profit between $6.2 and $6.6 billion for the year. The stock price rose by 8.3% following the announcement, indicating a positive response from investors.
Following the spin-off of GE Vernova, GE Aerospace has now become a standalone company that includes renewable energy and power. Analysts value GE Aerospace at $175.00 per share based on the 2025 EV/EBITDA methodology, with a ‘Hold’ rating and an implied 8.5% upside from the current market price. Risks to the target price include slower growth in the aviation industry, supply chain shortages, and lower-than-expected improvements in engine performance.
GE Aerospace’s profit and revenue gains are expected to continue due to strong demand for maintenance and new engines, although margins may decrease as spare parts demand increases. The company’s presence in the defense sector also provides stability to the commercial business. GE Aerospace aims to achieve $10 billion in operating profit by 2028 and has authorized a $15 billion share buy-back program, demonstrating confidence in its future growth prospects.
In 1Q24, GE Aerospace reported revenue growth of 10.8% YoY to $16.0 billion for the consolidated company, with operating profit (GAAP) decreasing by 71.3% YoY. Adjusted sales increased to $15.2 billion, with operating profit (non-GAAP) up 75.8% YoY to $1.5 billion. The company also repurchased common shares worth $0.1 billion and made investments in manufacturing facilities and supply chain enhancements to drive future growth.
GE Aerospace’s outlook for FY24 includes revenue growth in the lower double-digit range, operating profit between $6.2 and $6.6 billion, adjusted EPS of $3.80 – $4.05, and free cash flow exceeding $5 billion. The company aims for a high single-digit CAGR from 2025-2028, operating income of $10 billion, and 100% cash flow conversion by 2028. With continued investments in manufacturing and supply chain, GE Aerospace is positioning itself for long-term success in the aerospace industry.
Overall, GE Aerospace’s strong performance in 1Q24 and upbeat outlook for FY24 demonstrate the company’s resilience and growth potential in the aviation sector. By focusing on innovation, efficiency, and strategic investments, GE Aerospace is well-positioned to capitalize on opportunities in the aerospace and defense markets, delivering value to its shareholders and customers alike.
