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GE Aerospace Drops 8.7% Year to Date: How Should You Play the Stock?
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Key Takeaways
GE Aerospace stock fell 8.7% YTD despite a record $190B backlog and strong demand outlook.
GE trades at 36.28X forward P/E, above industry and peers, signaling stretched valuation concerns.
GE expects low-double-digit 2026 revenue growth, backed by engine demand and defense contracts.
GE Aerospace’s (GE - Free Report) shares have lost 8.7% year to date against the industry’s growth of 2%. Following a massive multi-year rally, the stock has declined amid concerns over macroeconomic volatility, rising fuel prices in the aerospace sector, supply chain constraints and high valuation multiples. In comparison, GE’s peers like RTX Corporation (RTX - Free Report) and Textron Inc. (TXT - Free Report) have returned 7% and 1%, respectively, over the said time frame.
GE’s Price Performance
Image Source: Zacks Investment Research
Despite a record backlog of $190 billion (exiting fourth-quarter 2025), the stock faces pressure from constrained margins amid rising operating expenses and capital expenditures. However, GE is expected to benefit from solid momentum in both commercial and military aircraft programs, with strength in air travel and strong defense budgets. So, what should investors do with the stock? Let’s dig deep to find out.
GE Shares Are Overvalued
GE Aerospace has a stretched valuation as suggested by a Value Score of D.
GE is trading at a forward 12-month price-to-earnings (P/E) ratio of 36.28X, higher than the industry average of 31.21X. In comparison with GE’s valuation, its peers, RTX Corp. and Textron, are trading cheaper. RTX Corp. and Textron are currently trading at 28.07X and 13.03X, respectively.
GE Stock’s Valuation
Image Source: Zacks Investment Research
End-Market Strength & Investments Aid GE’s Growth
GE Aerospace is benefiting from a growing installed base and higher utilization of engine platforms, driven by strong momentum and growth across commercial and defense sectors. Solid demand for LEAP, GEnx and GE9X engines and services, supported by growth in air traffic, fleet renewal and expansion activities, is proving beneficial for the Commercial Engines & Services business. During 2025, the company secured more than 500 engine wins at the Dubai Airshow, including deals from flydubai for GEnx engines and Riyadh Air for LEAP-1A engines.
Growing popularity for the company’s propulsion and additive technologies, critical aircraft systems and aftermarket services in the defense sector is driving the Defense & Propulsion Technologies business’ performance. During 2025, the company secured a $5 billion contract from the U.S. Air Force to supply F110 engines, parts and support services as part of a Foreign Military Sales program.
GE Aerospace also received an Indefinite Delivery Indefinite Quantity contract from the U.S. Army to supply F110 engines for F-15 and F-16 jets used by allied countries. For 2026, it expects adjusted revenues to increase in the low-double-digit range, including mid-teens growth in the commercial engines and services unit and mid-to-high single-digit growth in the defense and propulsion technologies unit.
GE Aerospace remains committed to making investments to boost growth. For instance, the company has been on track to invest more than $1 billion in its MRO facilities around the world over the next five years. This includes the acquisition of a dedicated LEAP test cell, which will unlock a major constraint in its shop visit output. In 2026, it plans to invest an additional $1 billion in U.S. manufacturing and technology. These investments will allow the company to boost its operational capacities, introduce new technologies and provide better services to its commercial and defense customers.
Its commitment to rewarding its shareholders through dividends and share buybacks is encouraging, too. In 2025, the company paid dividends of $1.45 billion, up 44.1% year over year, to its shareholders. In the same period, it bought back shares for $7.4 billion.
However, it has been dealing with the adverse impacts of the high operating costs and expenses. In fourth-quarter 2025, its cost of sales surged 23.7% year over year, while its adjusted operating profit margin contracted 90 basis points to 19.2%.
Earnings estimates for GE have increased over the past 60 days. The Zacks Consensus Estimate for 2026 earnings is pegged at $7.44 per share, reflecting a decrease of 0.1% in the past 60 days. The figure indicates year-over-year growth of 16.8%.
The consensus mark for 2027 earnings is pinned at $8.61 per share, reflecting an increase of 0.7% in the past 60 days. The figure suggests year-over-year growth of 15.7%.
Image Source: Zacks Investment Research
Conclusion
GE Aerospace’s solid foothold and persistent strength in the commercial and defense aerospace markets, driven by solid build rates and a robust defense budget, bode well for growth. However, a challenging macroeconomic environment, supply chain disruptions and stretched valuation make the stock risky for potential investors.
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GE Aerospace Drops 8.7% Year to Date: How Should You Play the Stock?
Key Takeaways
GE Aerospace’s (GE - Free Report) shares have lost 8.7% year to date against the industry’s growth of 2%. Following a massive multi-year rally, the stock has declined amid concerns over macroeconomic volatility, rising fuel prices in the aerospace sector, supply chain constraints and high valuation multiples. In comparison, GE’s peers like RTX Corporation (RTX - Free Report) and Textron Inc. (TXT - Free Report) have returned 7% and 1%, respectively, over the said time frame.
GE’s Price Performance
Image Source: Zacks Investment Research
Despite a record backlog of $190 billion (exiting fourth-quarter 2025), the stock faces pressure from constrained margins amid rising operating expenses and capital expenditures. However, GE is expected to benefit from solid momentum in both commercial and military aircraft programs, with strength in air travel and strong defense budgets. So, what should investors do with the stock? Let’s dig deep to find out.
GE Shares Are Overvalued
GE Aerospace has a stretched valuation as suggested by a Value Score of D.
GE is trading at a forward 12-month price-to-earnings (P/E) ratio of 36.28X, higher than the industry average of 31.21X. In comparison with GE’s valuation, its peers, RTX Corp. and Textron, are trading cheaper. RTX Corp. and Textron are currently trading at 28.07X and 13.03X, respectively.
GE Stock’s Valuation
Image Source: Zacks Investment Research
End-Market Strength & Investments Aid GE’s Growth
GE Aerospace is benefiting from a growing installed base and higher utilization of engine platforms, driven by strong momentum and growth across commercial and defense sectors. Solid demand for LEAP, GEnx and GE9X engines and services, supported by growth in air traffic, fleet renewal and expansion activities, is proving beneficial for the Commercial Engines & Services business. During 2025, the company secured more than 500 engine wins at the Dubai Airshow, including deals from flydubai for GEnx engines and Riyadh Air for LEAP-1A engines.
Growing popularity for the company’s propulsion and additive technologies, critical aircraft systems and aftermarket services in the defense sector is driving the Defense & Propulsion Technologies business’ performance. During 2025, the company secured a $5 billion contract from the U.S. Air Force to supply F110 engines, parts and support services as part of a Foreign Military Sales program.
GE Aerospace also received an Indefinite Delivery Indefinite Quantity contract from the U.S. Army to supply F110 engines for F-15 and F-16 jets used by allied countries. For 2026, it expects adjusted revenues to increase in the low-double-digit range, including mid-teens growth in the commercial engines and services unit and mid-to-high single-digit growth in the defense and propulsion technologies unit.
GE Aerospace remains committed to making investments to boost growth. For instance, the company has been on track to invest more than $1 billion in its MRO facilities around the world over the next five years. This includes the acquisition of a dedicated LEAP test cell, which will unlock a major constraint in its shop visit output. In 2026, it plans to invest an additional $1 billion in U.S. manufacturing and technology. These investments will allow the company to boost its operational capacities, introduce new technologies and provide better services to its commercial and defense customers.
Its commitment to rewarding its shareholders through dividends and share buybacks is encouraging, too. In 2025, the company paid dividends of $1.45 billion, up 44.1% year over year, to its shareholders. In the same period, it bought back shares for $7.4 billion.
However, it has been dealing with the adverse impacts of the high operating costs and expenses. In fourth-quarter 2025, its cost of sales surged 23.7% year over year, while its adjusted operating profit margin contracted 90 basis points to 19.2%.
GE’s Earnings Estimate Revision Shows Steady Trend
Earnings estimates for GE have increased over the past 60 days. The Zacks Consensus Estimate for 2026 earnings is pegged at $7.44 per share, reflecting a decrease of 0.1% in the past 60 days. The figure indicates year-over-year growth of 16.8%.
The consensus mark for 2027 earnings is pinned at $8.61 per share, reflecting an increase of 0.7% in the past 60 days. The figure suggests year-over-year growth of 15.7%.
Image Source: Zacks Investment Research
Conclusion
GE Aerospace’s solid foothold and persistent strength in the commercial and defense aerospace markets, driven by solid build rates and a robust defense budget, bode well for growth. However, a challenging macroeconomic environment, supply chain disruptions and stretched valuation make the stock risky for potential investors.
GE currently has a Zacks Rank #3 (Hold), which implies that investors should wait for a more favorable point to start accumulating the stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.