GE Aerospace Earnings Are on Tap. After the Turnaround, Investors Wonder What’s Next.

GE Aerospace is a leader in jet propulsion. It and BETA Technologies have partnered to advance hybrid electric flight. (Courtesy GE Aerospace)

Key Points

• GE Aerospace is projected to report third-quarter earnings per share of $1.46 on sales of $10.4 billion.
• Management anticipates 2025 operating profit between $8.2 billion and $8.5 billion, an increase from prior guidance.
• GE Aerospace stock has risen approximately 80% year to date, outperforming the S&P 500 by 67 percentage points.

Investors had to wait 9,150 days, but GE Aerospace stock hit a new all-time high in September. It was a sign the turnaround effort led by CEO Larry Culp was complete, and with third-quarter earnings on deck, investors are wondering what is next.

GE Aerospace is slated to report results Tuesday morning. Wall Street is looking for earnings per share of $1.46 from sales of $10.4 billion, according to FactSet. A year ago, in the third quarter of 2024, GE reported EPS of $1.15 from sales of $8.9 billion.

Sales and earnings are growing with higher demand for commercial travel and defense technologies, and improved profit margins across the business.

Things are good right now for the maker of jet engines. Still, it can take a lot for shares to move up, even on good news. GE stock dropped 2.2% after the company reported a second-quarter earnings beat in July. Along with solid results, short- and long-term guidance was also raised.

Management expects 2025 operating profit of between $8.2 billion and $8.5 billion, up from their prior range of $7.8 billion to $8.2 billion. Looking further down the road, GE Aerospace management is targeting 2028 operating profit of about $11.5 billion, up from prior guidance given in 2024 of $10 billion. What’s more, sales growth between now and 2028 is expected to increase by double-digits annually, up from prior guidance of high single-digit growth.

Improved performance has created “the valuation conundrum,” wrote Vertical Research Partners analyst Rob Stallard in a recent report. GE Aerospace stock trades for about 44 times estimated 2026 earnings, a premium to most other aerospace stocks. RTX , for instance, trades for about 24 times estimated 2026 earnings.

GE Aerospace is expected to grow earnings faster than RTX, though. Stallard isn’t too worried about valuation.

“There are cheaper aero alternatives, particularly in Europe, but our sense is that U.S. investors are not overly concerned with GE’s valuation as long as it continues to generate strong earnings and cash flow growth,” added the analyst.

Along with solid quarterly earnings and cash numbers he is looking for management to update the price/cost dynamic. He expects GE Aerospace to be able to raise prices while lowering costs, boosting margins.

At the same time, new engines carry lower profit margins than aftermarket parts. Boeing and Airbus are both trying to boost plane production, which will shift GE Aerospace’s mix of business in years to come. More new engines in the mix could pressure profit margins.

How GE Aerospace management explains that dynamic could move shares. Stallard is still bullish, rating shares Buy with a $340 price target.

Options markets imply shares will move about 5%, up or down, following earnings. Shares have moved an average of about 6% over the past four quarterly reports. Shares have fallen twice and risen twice over that span.

Coming into the week, GE Aerospace stock was up about 80% year to date, beating the S&P 500 by 67 percentage points.

Write to Al Root at allen.root@dowjones.com