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GE Trades Below 50-Day and 200-Day SMA: How to Play the Stock?
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Key Takeaways
GE trades below its 50-day and 200-day SMAs despite strong engine demand and segment growth.
Commercial Engines & Services revenues rose 27%, while orders increased 18% and deliveries climbed 26%.
GE faces higher costs, $19.2 billion in borrowings and a forward P/E above its industry average.
GE Aerospace (GE - Free Report) stock is currently trading below its 50-day and 200-day simple moving averages (SMAs). A stock trading below both its 50-day and 200-day simple moving averages is generally viewed as being in a sustained downtrend, reflecting weakness in both short-term momentum and long-term investor sentiment.
In such cases, these moving averages often act as resistance levels, making it more difficult for the stock to sustain an upward move unless supported by strong trading volume or positive catalysts. While this setup is generally considered bearish, it may also signal that the stock is approaching an oversold level and could be poised for a rebound or accumulation provided that its underlying fundamentals remain strong.
GE Stock’s 50-Day & 200-Day Moving Averages
Image Source: Zacks Investment Research
GE shares have gained 6.1% in the past year, underperforming the S&P 500 composite’s growth of 16.5%. However, the stock performed better than the industry, which declined 11.3% over the same period. The company’s peers like Howmet Aerospace Inc. (HWM - Free Report) and Textron Inc. (TXT - Free Report) have gained 21.2% and declined 2.4%, respectively, over the said time frame.
GE’s One-Year Price Performance
Image Source: Zacks Investment Research
Let’s examine the company’s strengths and weaknesses to better analyze how to play GE stock in this situation.
Factors Acting as Tailwinds for GE Stock
GE Aerospace is gaining from a growing installed base and higher utilization of its engine platforms, supported by strong demand across the commercial and defense aviation markets. Strong demand for LEAP, GEnx and GE9X engines and related services, driven by rising air traffic, fleet renewal and airline expansion, is boosting the Commercial Engines & Services segment. In the second quarter of 2026, revenues in the Commercial Engines & Services segment rose 27%, while orders increased 18% from the prior-year quarter. In the same period, engine deliveries in the segment increased 26% year over year, reflecting improved production levels.
In the first half of 2026, the company secured several major engine orders and service agreements. GE Aerospace secured GEnx engine orders from United Airlines and Delta Air Lines for their Boeing 787 Dreamliners, while it secured LEAP engine orders from American Airlines and Copa Airlines for their narrowbody fleet. The company also secured an order from Copa Airlines for up to 120 LEAP-1B engines to power the airline's expanding Boeing 737 MAX fleet.
Growing popularity of the company’s propulsion & additive technologies, critical aircraft systems and aftermarket services in the defense sector is driving the Defense & Propulsion Technologies segment’s performance. In the second quarter, Defense & Systems revenues increased 12% year over year, supported by higher services and equipment sales, with unit deliveries up 7%. Propulsion & Additive Technologies revenues climbed 23%, led by Avio Aero.
During the first half of 2026, GE received a contract from Turkish Aerospace Industries to continue integrating its F404 engine into Türkiye’s Hurjet jet trainer. It also secured a $1.4 billion contract for T408 engines to support the U.S. Marine Corps’ CH-53K helicopter fleet.
GE continues to return cash through dividends while adjusting repurchases to protect liquidity. In the first six months of 2026, it paid dividends of $873 million and repurchased shares worth $4.2 billion. The company also increased its quarterly dividend by 30.6% to 36 cents per share in February 2026.
Near-Term Headwinds Prevail
GE has been dealing with the adverse impacts of the high cost of sales and operating expenses. In second-quarter 2026, its cost of sales (comprising costs of equipment and services sold) surged 26.7% year over year to $8.7 billion. While selling, general and administrative expenses increased 10.9% to $1.1 billion, research and development expenses rose 28.1% year over year. In the quarter, the company’s operating profit margin contracted 130 basis points to 21.7%.
The rising debt level is also concerning for the company. Exiting the second quarter of 2026, GE Aerospace’s total borrowings were $19.2 billion. The figure comprised $2 billion of short-term borrowings and $17.2 billion of long-term borrowings.
Valuation Remains an Overhang
GE Aerospace is trading at a forward 12-month price-to-earnings (P/E) ratio of 35.24X, higher than the industry average of 29.34X. This elevated valuation could make the stock vulnerable to further pullbacks if market sentiment sours.
Image Source: Zacks Investment Research
While its peer, Textron, is trading cheaper compared with GE, Howmet Aerospace is trading at a premium. Notably, Textron and Howmet Aerospace are currently trading at 11.40X and 37.36X, respectively.
Earnings Estimate Revision
The Zacks Consensus Estimate for GE’s 2026 earnings has increased 3.3% to $7.91 per share over the past 60 days, indicating year-over-year growth of 24.2%. The consensus mark for 2027 earnings increased 3.3% to $9.04 per share, indicating a year-over-year increase of 14.3%.
Image Source: Zacks Investment Research
Final Take
Persistent strength in the commercial and defense aerospace markets, supported by solid production rates and a robust defense budget, is expected to benefit GE Aerospace in the coming quarters. However, rising operating expenses, elevated debt levels and a premium valuation could limit the company’s near-term prospects. GE Aerospace currently carries a Zacks Rank #3 (Hold).
View the Zacks #1 Rank List
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GE Trades Below 50-Day and 200-Day SMA: How to Play the Stock?
Key Takeaways
GE Aerospace (GE - Free Report) stock is currently trading below its 50-day and 200-day simple moving averages (SMAs). A stock trading below both its 50-day and 200-day simple moving averages is generally viewed as being in a sustained downtrend, reflecting weakness in both short-term momentum and long-term investor sentiment.
In such cases, these moving averages often act as resistance levels, making it more difficult for the stock to sustain an upward move unless supported by strong trading volume or positive catalysts. While this setup is generally considered bearish, it may also signal that the stock is approaching an oversold level and could be poised for a rebound or accumulation provided that its underlying fundamentals remain strong.
GE Stock’s 50-Day & 200-Day Moving Averages
Image Source: Zacks Investment Research
GE shares have gained 6.1% in the past year, underperforming the S&P 500 composite’s growth of 16.5%. However, the stock performed better than the industry, which declined 11.3% over the same period. The company’s peers like Howmet Aerospace Inc. (HWM - Free Report) and Textron Inc. (TXT - Free Report) have gained 21.2% and declined 2.4%, respectively, over the said time frame.
GE’s One-Year Price Performance
Image Source: Zacks Investment Research
Let’s examine the company’s strengths and weaknesses to better analyze how to play GE stock in this situation.
Factors Acting as Tailwinds for GE Stock
GE Aerospace is gaining from a growing installed base and higher utilization of its engine platforms, supported by strong demand across the commercial and defense aviation markets. Strong demand for LEAP, GEnx and GE9X engines and related services, driven by rising air traffic, fleet renewal and airline expansion, is boosting the Commercial Engines & Services segment. In the second quarter of 2026, revenues in the Commercial Engines & Services segment rose 27%, while orders increased 18% from the prior-year quarter. In the same period, engine deliveries in the segment increased 26% year over year, reflecting improved production levels.
In the first half of 2026, the company secured several major engine orders and service agreements. GE Aerospace secured GEnx engine orders from United Airlines and Delta Air Lines for their Boeing 787 Dreamliners, while it secured LEAP engine orders from American Airlines and Copa Airlines for their narrowbody fleet. The company also secured an order from Copa Airlines for up to 120 LEAP-1B engines to power the airline's expanding Boeing 737 MAX fleet.
Growing popularity of the company’s propulsion & additive technologies, critical aircraft systems and aftermarket services in the defense sector is driving the Defense & Propulsion Technologies segment’s performance. In the second quarter, Defense & Systems revenues increased 12% year over year, supported by higher services and equipment sales, with unit deliveries up 7%. Propulsion & Additive Technologies revenues climbed 23%, led by Avio Aero.
During the first half of 2026, GE received a contract from Turkish Aerospace Industries to continue integrating its F404 engine into Türkiye’s Hurjet jet trainer. It also secured a $1.4 billion contract for T408 engines to support the U.S. Marine Corps’ CH-53K helicopter fleet.
GE continues to return cash through dividends while adjusting repurchases to protect liquidity. In the first six months of 2026, it paid dividends of $873 million and repurchased shares worth $4.2 billion. The company also increased its quarterly dividend by 30.6% to 36 cents per share in February 2026.
Near-Term Headwinds Prevail
GE has been dealing with the adverse impacts of the high cost of sales and operating expenses. In second-quarter 2026, its cost of sales (comprising costs of equipment and services sold) surged 26.7% year over year to $8.7 billion. While selling, general and administrative expenses increased 10.9% to $1.1 billion, research and development expenses rose 28.1% year over year. In the quarter, the company’s operating profit margin contracted 130 basis points to 21.7%.
The rising debt level is also concerning for the company. Exiting the second quarter of 2026, GE Aerospace’s total borrowings were $19.2 billion. The figure comprised $2 billion of short-term borrowings and $17.2 billion of long-term borrowings.
Valuation Remains an Overhang
GE Aerospace is trading at a forward 12-month price-to-earnings (P/E) ratio of 35.24X, higher than the industry average of 29.34X. This elevated valuation could make the stock vulnerable to further pullbacks if market sentiment sours.
Image Source: Zacks Investment Research
While its peer, Textron, is trading cheaper compared with GE, Howmet Aerospace is trading at a premium. Notably, Textron and Howmet Aerospace are currently trading at 11.40X and 37.36X, respectively.
Earnings Estimate Revision
The Zacks Consensus Estimate for GE’s 2026 earnings has increased 3.3% to $7.91 per share over the past 60 days, indicating year-over-year growth of 24.2%. The consensus mark for 2027 earnings increased 3.3% to $9.04 per share, indicating a year-over-year increase of 14.3%.
Image Source: Zacks Investment Research
Final Take
Persistent strength in the commercial and defense aerospace markets, supported by solid production rates and a robust defense budget, is expected to benefit GE Aerospace in the coming quarters. However, rising operating expenses, elevated debt levels and a premium valuation could limit the company’s near-term prospects. GE Aerospace currently carries a Zacks Rank #3 (Hold).
Existing shareholders may consider holding their positions, while prospective investors may want to wait for a more attractive entry point following a pullback in the stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.