General Electric (GE) AI Stock Analysis

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General Electric

(NYSE:GE)

70Outperform

GE Aerospace's overall score reflects a combination of strong earnings guidance and sentiment from the latest earnings call, which is a significant positive factor. Financial performance shows mixed results with operational improvements but cash flow challenges. The technical indicators suggest short-term weakness, while valuation indicates potential overpricing. The positive outlook for 2025 and strategic initiatives provide confidence despite supply chain issues.

Positive Factors

Contract Awards

GE was awarded a subcontract to deliver avionics systems for the Army's Future Long Range Assault Aircraft program on TXT Bell’s V-280 Valor tiltrotor.

New Orders

Korean Air finalized an order for 20 777-9s, 20 787-10s, and 10 787 options, including ordering GEnx and GE9X engines to power the wide-bodies.

Negative Factors

Global Air Traffic

A downturn in global air traffic due to macroeconomic weakness could negatively impact demand for aftermarket services.

Operational Costs

The increase in SG&A expenses indicates higher operational costs, which could affect profitability.

General Electric (GE) vs. S&P 500 (SPY)

Market Cap

$201.00B

Dividend Yield0.81%

Average Volume (3M)6.65M

Price to Earnings (P/E)31.3

Beta (1Y)1.27

Revenue Growth-32.60%

EPS Growth-28.55%

CountryUS

Employees53,000

SectorIndustrials

Sector Strength61

IndustryAerospace & Defense

Share Statistics

EPS (TTM)5.97

Shares Outstanding1,073,290,500

10 Day Avg. Volume9,919,667

30 Day Avg. Volume6,653,894

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)0.36

Price to Cash Flow (P/CF)42.20

P/FCF Ratio42.20

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$230.07

Price Target Upside26.75% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering16

General Electric Business Overview & Revenue Model

Company DescriptionGE Aerospace is a leading global provider of jet engines, components, and integrated systems for commercial, military, and business aviation. With a strong heritage in engineering excellence and innovation, the company produces a wide range of products, including advanced propulsion systems, avionics, digital solutions, and comprehensive support services. GE Aerospace is committed to shaping the future of flight by delivering efficient, reliable, and sustainable aviation solutions.

How the Company Makes MoneyGE Aerospace generates revenue primarily through the sale of jet engines and related systems to commercial airlines, military organizations, and aircraft manufacturers. The company also earns substantial income from long-term service agreements, providing maintenance, repair, and overhaul (MRO) services to ensure optimal performance and longevity of its engines and systems. Additionally, GE Aerospace capitalizes on digital solutions, offering analytics and software that enhance aircraft performance and operational efficiency. Strategic partnerships with key aviation industry players and ongoing investments in research and development further bolster its revenue streams, positioning the company as a leader in the aerospace sector.

General Electric Financial Statement Overview

Summary

GE Aerospace shows a mixed performance with strong gross profit margins and improving EBIT and EBITDA margins. However, declining revenue and cash flow challenges, coupled with declining equity, raise concerns about financial flexibility and sustainability.

Income Statement

Positive

GE Aerospace shows a mixed performance in its income statement. The gross profit margin is strong, indicating efficient cost management. However, the net profit margin has been volatile, with a recent improvement. Revenue growth rate is negative due to a decline in the latest year but has shown signs of potential recovery. The EBIT and EBITDA margins are improving, which signals operational efficiency. Overall, despite recent challenges, the company is moving towards better profitability.

Balance Sheet

Positive

The balance sheet reflects a stable financial position with a manageable debt-to-equity ratio. Stockholders' equity is positive, though it has decreased over the years, indicating potential risk in maintaining financial flexibility. The equity ratio shows a reasonable level of assets funded by equity. While there is a decrease in total assets and equity, the reduction in debt levels is a positive sign, contributing to financial stability.

Cash Flow

Neutral

Cash flow analysis shows some concerns. Free cash flow is volatile, and the growth rate is negative, reflecting challenges in generating sufficient cash. The operating cash flow to net income ratio is indeterminate due to zero operating cash flow in the latest period, highlighting potential cash generation issues. Free cash flow to net income ratio cannot be assessed due to missing data, adding uncertainty to cash flow sustainability.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
38.70B	67.95B	58.10B	56.47B	75.83B
	Gross Profit
14.39B	17.56B	13.83B	13.09B	17.96B
	EBIT
6.66B	3.57B	276.00M	1.06B	409.00M
	EBITDA
9.79B	13.38B	3.54B	3.38B	2.83B
	Net Income Common Stockholders
6.56B	9.48B	339.00M	-6.34B	5.70B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
14.60B	22.67B	23.42B	28.07B	43.95B
	Total Assets
123.14B	163.04B	188.85B	198.87B	253.45B
	Total Debt
2.04B	22.94B	26.15B	35.19B	75.07B
	Net Debt
-11.58B	5.97B	10.34B	19.41B	38.44B
	Total Liabilities
103.58B	134.47B	153.94B	157.26B	216.38B
	Stockholders Equity
19.34B	27.38B	33.70B	40.31B	35.55B
Cash Flow		Free Cash Flow
3.68B	3.58B	4.74B	1.97B	194.00M
	Operating Cash Flow
4.71B	5.18B	5.92B	3.33B	3.60B
	Investing Cash Flow
-1.67B	3.98B	2.27B	21.31B	16.64B
	Financing Cash Flow
-6.73B	-8.61B	-5.58B	-45.18B	-19.85B

General Electric Technical Analysis

Technical Analysis Sentiment

Negative

Last Price181.51

Price Trends

50DMA

199.06

Negative

100DMA

187.91

Negative

200DMA

180.41

Positive

Market Momentum

MACD

1.49

Positive

RSI

52.77

Neutral

STOCH

26.19

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GE, the sentiment is Negative. The current price of 181.51 is below the 20-day moving average (MA) of 194.88, below the 50-day MA of 199.06, and above the 200-day MA of 180.41, indicating a neutral trend. The MACD of 1.49 indicates Positive momentum. The RSI at 52.77 is Neutral, neither overbought nor oversold. The STOCH value of 26.19 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GE.

General Electric Risk Analysis

General Electric disclosed 18 risk factors in its most recent earnings report. General Electric reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

General Electric Peers Comparison

Overall Rating

UnderperformOutperform

Sector (62)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NOC	78 Outperform	$73.84B	18.08	27.75%	1.61%	4.44%	110.33%
RTX	77 Outperform	$171.47B	36.15	7.96%	1.96%	17.15%	58.66%
GD	75 Outperform	$72.87B	19.92	17.44%	2.09%	12.88%	13.78%
LMT	74 Outperform	$108.43B	20.72	81.04%	2.78%	5.14%	-19.14%
GE	70 Outperform	$201.00B	31.34	27.62%	0.81%	-32.60%	-28.55%
Sector *	62 Neutral	$7.68B	13.06	3.21%	3.34%	3.62%	-14.40%
BA	39 Underperform	$121.00B	―	-162.23%	―	-14.49%	-399.90%

* Industrials Sector Average

Performance Comparison

General Electric

181.67

28.07

18.27%

Boeing

156.84

-12.71

-7.50%

General Dynamics

276.65

-5.34

-1.89%

LMT

Lockheed Martin

474.90

36.01

8.20%

NOC

Northrop Grumman

516.09

67.69

15.10%

RTX

128.26

30.31

30.94%

General Electric Earnings Call Summary

Earnings Call Date: Jan 23, 2025 | % Change Since: -3.46% | Next Earnings Date: Apr 22, 2025

Earnings Call Sentiment Positive

The earnings call highlighted GE Aerospace's strong financial performance in 2024, marked by significant revenue, profit, and cash flow growth. Despite supply chain challenges impacting some areas, the company showed resilience and adaptability. The positive outlook for 2025, with expected growth across key metrics, underscores confidence in overcoming current challenges. The overall sentiment conveyed optimism due to robust demand and strategic initiatives.

Highlights

Record Orders and Revenue Growth

In Q4 2024, orders increased by 46% and revenue grew by 16% with double-digit growth in services and equipment. For the full year, revenue was up 10% and profit increased by 30% to $7.3 billion.

Strong Free Cash Flow

Free cash flow increased by 21% in Q4 and by nearly 30% for the year, reaching $6.1 billion with conversion over 120%.

Impressive Growth in Commercial Engines & Services

Q4 orders were up 50%, revenue increased by 19%, and profit rose by 44%. For the full year, profit grew by 25% to $7.1 billion.

Defense and Propulsion Technologies Growth

For Q4 2024, orders were up 22%, and defense units nearly doubled sequentially. Full-year revenue rose by 6% and profit increased by 17% to $1.1 billion.

Positive Outlook for 2025

GE Aerospace expects low double-digit revenue growth, profit in the range of $7.8 billion to $8.2 billion, EPS growth of 15% at the midpoint, and free cash flow of $6.3 billion to $6.8 billion for 2025.

Lowlights

Supply Chain Constraints Impact Deliveries

Supply chain issues led to lower internal shop visit volume and flat commercial engine output with LEAP deliveries down 5% in Q4 2024.

Challenges in Meeting Demand

Despite strong demand, material constraints and supplier issues affected the ability to meet full potential, requiring ongoing efforts to improve supply chain efficiency.

Company Guidance

During the GE Aerospace Q4 2024 earnings call, executives provided robust guidance for 2025, emphasizing anticipated continued growth across various financial metrics. They forecast low double-digit revenue growth, driven by mid-teens growth in the Commercial Engines & Services (CES) segment, with CES profit expected to increase by $700 million at the midpoint. The company aims for total profit between $7.8 billion and $8.2 billion, translating to EPS between $5.10 and $5.45, reflecting a 15% rise at the midpoint. Free cash flow is projected to reach $6.3 billion to $6.8 billion, maintaining a conversion rate above 100%. GE Aerospace plans to increase its share repurchases to $7 billion and raise its dividend by 30%, pending board approval, underscoring strong shareholder returns. The company highlighted the strategic use of their FLIGHT DECK operating model to enhance operational efficiency and address supply chain constraints, supporting both new engine deliveries and aftermarket services.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.