GE Aerospace Soars on 2025 Results: Wall Street’s Stock of the Day Despite Market Jitters
- Why Did GE Aerospace’s Stock Drop Despite Blowout Earnings?
- LEAP Engines & Services: The Growth Engines
- 2026 Forecasts: Can GE Keep the Altitude?
- The Margin Mystery: Temporary Turbulence or Long-Term Drag?
- Wall Street’s Split Verdict
- FAQ: Your GE Aerospace Cheat Sheet
GE Aerospace (NYSE: GE) delivered stellar 2025 earnings, with revenue up 18% and net profit jumping 30%, yet its shares tumbled 6.68% to $297.19. Bank of America remains bullish, maintaining a $365 price target, while investors fret over a slight margin dip in Q4. The company’s 2026 outlook is rosy, targeting 10–15% revenue growth and record free cash flow. Here’s why Wall Street can’t decide if GE is a buy or a cautionary tale.
Why Did GE Aerospace’s Stock Drop Despite Blowout Earnings?
GE Aerospace’s 2025 results were a textbook beat: $45.85B revenue (+18%), $10B net income (+30%), and EPS of $8.05 (+32%). FactSet consensus? Obliterated. Yet, shares nosedived 6.68%—classic "sell the news" behavior. The culprit? A 90-basis-point Q4 operating margin slip to 19.2%, spooking perfection-demanding investors. As one BTCC analyst quipped, "Wall Street punishes even the slightest hiccup, like a chef docking a Michelin star for under-salted soup."
LEAP Engines & Services: The Growth Engines
The LEAP engine notched a 28% delivery surge, propelling Commercial Engine Services (CES) revenue up 26%. GE funneled $1B into global MRO networks, including $500M for LEAP capacity boosts in Brazil, Malaysia, and Dubai. "We’re building highways for jet engines," CEO Larry Culp told investors, referencing the 40% spike in priority supplier materials.
| Metric | 2025 Actual | FactSet Estimate |
|---|---|---|
| Revenue | $45.85B | $41.65B |
| Net Income | $10B | $6.67B |
2026 Forecasts: Can GE Keep the Altitude?
GE’s guidance suggests clear skies ahead: 10–15% revenue growth, $9.85–10.25B adjusted operating profit, and $8–8.4B free cash flow. Bank of America predicts CES segment revenue will climb mid-teens%, with defense (DPT) up mid/high single digits. The Aeroderivative business shift to DPT ($1.4B revenue) adds complexity—think of it as rearranging deck chairs, but on a supersonic jet.
The Margin Mystery: Temporary Turbulence or Long-Term Drag?
That Q4 margin dip sticks out like a sore thumb in an otherwise flawless report. Was it supply chain gremlins or strategic reinvestment? Culp’s "Flight Deck" plan suggests the latter—akin to Tesla sacrificing margins for volume dominance. "Margins are like airplane toilets," joked one trader. "Nobody talks about them until they’re broken."
Wall Street’s Split Verdict
Bank of America’s $365 target implies 23% upside, but the market’s knee-jerk selloff reveals deeper skepticism. With a $190B order backlog (up 32% YoY), GE’s either a coiled spring or a "show me" stock. As TradingView data shows, short interest crept up pre-earnings—proof that even blue chips aren’t immune to doubt.
FAQ: Your GE Aerospace Cheat Sheet
Why did GE stock fall after good earnings?
Investors fixated on the Q4 margin decline (19.2% vs. 21.4% annual) despite crushing annual targets. It’s like getting an A- on one test after straight A+s—perfectionists panic.
What’s GE’s 2026 revenue growth target?
10–15%, with CES (civil engines) leading at ~15% and defense (DPT) trailing at 5–9%.
Is Bank of America still bullish?
Yes, with a $365 price target and Buy rating, citing LEAP engine dominance and service growth.
