Industrial giant GE Aerospace (NYSE:GE) is working on a hybrid electric engine that it hopes will power next-gen narrow-body jets by the mid-2030s, according to Reuters. This technology is being developed together with NASA and combines traditional jet fuel with electricity to reduce fuel consumption by up to 5%. Initial tests of the hybrid components have been completed, and plans to test the entire system are next.
It’s worth noting that the global aviation industry is responsible for about 2% of global emissions and has set a goal of net-zero emissions by 2050. GE’s hybrid engine program is just one of its several initiatives to develop more fuel-efficient technology, which also includes an open-bladed jet engine with France’s Safran that could cut fuel use and emissions by 20%.
Supply Chain Issues Persist
Meanwhile, GE Aerospace is still facing supply chain issues that are expected to persist into next year despite a slowdown in Boeing’s jet production. Russel Stokes, head of GE Aerospace’s commercial engines and services, noted that while they are aligned with Boeing’s current production rates, they are working to support a ramp-up in the coming years. The slowdown in production due to Boeing’s increased regulatory scrutiny might help the supply chain catch up.
Still, GE is addressing these issues by sending engineers to supplier sites and by using AI to overcome bottlenecks. Furthermore, the company is planning to use advanced technology to detect chemical anomalies in metal parts to improve turnaround times in repair shops, which is crucial since airline CEOs have pointed to engine repair delays as a significant constraint.
Is GE Still a Good Buy?
Turning to Wall Street, analysts have a Strong Buy consensus rating on GE stock based on 15 Buys assigned in the past three months, as indicated by the graphic below. After a 99.6% rally in its share price over the past year, the average GE price target of $183.47 per share implies 11.21% upside potential.
