We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
GE vs. TXT: Which Aerospace & Defense Stock Should You Invest in Now?
Read MoreHide Full Article
Key Takeaways
GE's commercial engine revenues rose 27%, supported by higher orders and engine deliveries.
TXT's Bell and Systems units benefit from military demand, with $10.8B in combined backlogs.
GE's 2026 sales and EPS estimates imply 19.5% and 24.2% growth, versus 4.9% and 6.6% for Textron.
Rising global defense budgets and growing demand for advanced military technologies continue to support the aerospace and defense industry, benefiting players like GE Aerospace (GE - Free Report) and Textron Inc. (TXT - Free Report) . As rivals, both companies manufacture highly engineered aircraft components for commercial and military aircraft, serving customers across the United States and international markets.
GE Aerospace benefits from robust demand for commercial engines, propulsion and additive technologies. Textron is aiding from multiyear demand visibility across its aerospace and defense franchises, supported by aviation backlog, aftermarket activity, defense programs and product upgrades.
Let’s take a closer look at their fundamentals, growth prospects and challenges.
The Case for GE Aerospace
A growing installed base and higher utilization of its engine platforms, supported by strong demand across the commercial and defense aviation markets, is aiding GE Aerospace. Strong demand for LEAP, GEnx and GE9X engines and related services, driven by rising air traffic, fleet renewal and airline expansion, is boosting GE’s 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. Engine deliveries in the segment also increased 26% year over year in the same period, reflecting improved production levels.
In the first half of 2026, GE 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.
The Defense & Propulsion Technologies segment’s performance is supported by the growing popularity of the company’s propulsion & additive technologies, critical aircraft systems and aftermarket services in the defense sector. In the second quarter, Defense & Systems revenues surged 12% year over year, driven 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.
However, 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 surged 28.1% year over year. In the quarter, GE Aerospace’s operating profit margin contracted 130 basis points to 21.7%.
The Case for Textron
Commercial aircraft demand and aftermarket activity continue to support Textron’s Aviation segment. In the second quarter of 2026, the segment’s revenues increased 1% year over year to $1.54 billion, while aftermarket revenues rose to $512 million from $507 million. In the quarter, the company delivered 40 jets and 44 commercial turboprops, with turboprop deliveries up from 34 a year earlier.
Textron’s defense businesses continue to benefit from military production, training demand and funded development programs. The Bell segment’s second-quarter revenues increased 6% year over year, driven by higher H-1 and MV-75 volume, while commercial helicopter deliveries rose to 36 from 32. The segment completed the first two MV-75 wing structures, with labor hours declining across successive builds.
In the second quarter, Textron Systems segment’s revenues increased 7% on armored vehicles and ATAC services and segment profit rose 10%. Production also began on the Mobile Strike Force Vehicle program. Bell and Textron Systems segments ended the quarter with backlogs of $7.5 billion and $3.3 billion, respectively, supporting visibility beyond current deliveries.
The company repurchased $209 million of shares in the second quarter and $377 million in the first half of 2026, reducing common shares outstanding to 171.9 million from 174.3 million as of 2025-end. Although first-half manufacturing cash flow before pension contributions was negative $74 million, the retained outlook points to a second-half recovery. The balance sheet provides capacity to fund operations, product investment and repurchases.
However, Textron’s manufacturing cadence remains exposed to shortages, delayed parts and internal factory inefficiencies. Though supply conditions have improved in most areas, several key components still disrupt production sequencing and create out-of-station work. In the second quarter, Textron Aviation segment’s profit decreased despite revenue growth, reflecting manufacturing inefficiencies and lower aircraft volume and mix.
Textron’s revenue growth is not producing consistent operating leverage across its largest businesses. In the second quarter of 2026, Textron Aviation segment’s revenues increased 1%, but segment profit declined 3% and margin fell to 10.7%. Bell segment’s revenues rose 6%, while segment profit decreased 6% and margin declined to 7%, reflecting program performance and an unfavorable military mix. If pricing and volume growth continue to be offset by mix and execution costs, earnings may grow at a slower pace than revenues.
Price Performance
Image Source: Zacks Investment Research
In the past year, GE Aerospace shares have risen 5.8%, while Textron stock has declined 8.4%.
The Zacks Consensus Estimate for GE & Textron
The Zacks Consensus Estimate for GE’s 2026 sales and earnings per share (EPS) implies year-over-year growth of 19.5% and 24.2%, respectively. EPS estimates for both 2026 and 2027 have increased over the past 60 days.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Textron’s 2026 sales and EPS implies year-over-year growth of 4.9% and 6.6%, respectively. The EPS estimates for 2026 and 2027 have declined over the past 60 days.
Image Source: Zacks Investment Research
Valuation of GE & Textron
GE is trading at a forward 12-month price-to-earnings ratio of 36.36X, close to its median of 35.78X over the last five years. Textron’s forward earnings multiple sits at 10.88X, lower than its median of 13.45X over the same time frame.
Image Source: Zacks Investment Research
Final Take
GE Aerospace’s strong momentum in the commercial and defense aerospace markets, driven by strong demand for LEAP, GEnx and GE9X engines, higher engine deliveries and major engine orders, bodes well for growth. Given the strength across its commercial and defense businesses, GE continues to return cash to shareholders through dividends and share repurchases.
In contrast, Textron’s strength in commercial and defense aerospace markets, along with solid backlogs across its Bell and Textron Systems businesses, favors well for its growth. Its share repurchases and balance-sheet capacity are added strengths. However, this has been marred by manufacturing inefficiencies, component shortages and an unfavorable business mix, which might affect its near-term performance.
Despite its steeper valuation, GE holds robust prospects due to stronger estimates, stock price appreciation and better prospects for sales and profit growth. Given these factors, GE seems a better pick for investors than Textron currently. While GE carries a Zacks Rank #2 (Buy), Textron currently has a Zacks Rank #3 (Hold).
View the Zacks #1 Rank List
Image: Bigstock
GE vs. TXT: Which Aerospace & Defense Stock Should You Invest in Now?
Key Takeaways
Rising global defense budgets and growing demand for advanced military technologies continue to support the aerospace and defense industry, benefiting players like GE Aerospace (GE - Free Report) and Textron Inc. (TXT - Free Report) . As rivals, both companies manufacture highly engineered aircraft components for commercial and military aircraft, serving customers across the United States and international markets.
GE Aerospace benefits from robust demand for commercial engines, propulsion and additive technologies. Textron is aiding from multiyear demand visibility across its aerospace and defense franchises, supported by aviation backlog, aftermarket activity, defense programs and product upgrades.
Let’s take a closer look at their fundamentals, growth prospects and challenges.
The Case for GE Aerospace
A growing installed base and higher utilization of its engine platforms, supported by strong demand across the commercial and defense aviation markets, is aiding GE Aerospace. Strong demand for LEAP, GEnx and GE9X engines and related services, driven by rising air traffic, fleet renewal and airline expansion, is boosting GE’s 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. Engine deliveries in the segment also increased 26% year over year in the same period, reflecting improved production levels.
In the first half of 2026, GE 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.
The Defense & Propulsion Technologies segment’s performance is supported by the growing popularity of the company’s propulsion & additive technologies, critical aircraft systems and aftermarket services in the defense sector. In the second quarter, Defense & Systems revenues surged 12% year over year, driven 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.
However, 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 surged 28.1% year over year. In the quarter, GE Aerospace’s operating profit margin contracted 130 basis points to 21.7%.
The Case for Textron
Commercial aircraft demand and aftermarket activity continue to support Textron’s Aviation segment. In the second quarter of 2026, the segment’s revenues increased 1% year over year to $1.54 billion, while aftermarket revenues rose to $512 million from $507 million. In the quarter, the company delivered 40 jets and 44 commercial turboprops, with turboprop deliveries up from 34 a year earlier.
Textron’s defense businesses continue to benefit from military production, training demand and funded development programs. The Bell segment’s second-quarter revenues increased 6% year over year, driven by higher H-1 and MV-75 volume, while commercial helicopter deliveries rose to 36 from 32. The segment completed the first two MV-75 wing structures, with labor hours declining across successive builds.
In the second quarter, Textron Systems segment’s revenues increased 7% on armored vehicles and ATAC services and segment profit rose 10%. Production also began on the Mobile Strike Force Vehicle program. Bell and Textron Systems segments ended the quarter with backlogs of $7.5 billion and $3.3 billion, respectively, supporting visibility beyond current deliveries.
The company repurchased $209 million of shares in the second quarter and $377 million in the first half of 2026, reducing common shares outstanding to 171.9 million from 174.3 million as of 2025-end. Although first-half manufacturing cash flow before pension contributions was negative $74 million, the retained outlook points to a second-half recovery. The balance sheet provides capacity to fund operations, product investment and repurchases.
However, Textron’s manufacturing cadence remains exposed to shortages, delayed parts and internal factory inefficiencies. Though supply conditions have improved in most areas, several key components still disrupt production sequencing and create out-of-station work. In the second quarter, Textron Aviation segment’s profit decreased despite revenue growth, reflecting manufacturing inefficiencies and lower aircraft volume and mix.
Textron’s revenue growth is not producing consistent operating leverage across its largest businesses. In the second quarter of 2026, Textron Aviation segment’s revenues increased 1%, but segment profit declined 3% and margin fell to 10.7%. Bell segment’s revenues rose 6%, while segment profit decreased 6% and margin declined to 7%, reflecting program performance and an unfavorable military mix. If pricing and volume growth continue to be offset by mix and execution costs, earnings may grow at a slower pace than revenues.
Price Performance
Image Source: Zacks Investment Research
In the past year, GE Aerospace shares have risen 5.8%, while Textron stock has declined 8.4%.
The Zacks Consensus Estimate for GE & Textron
The Zacks Consensus Estimate for GE’s 2026 sales and earnings per share (EPS) implies year-over-year growth of 19.5% and 24.2%, respectively. EPS estimates for both 2026 and 2027 have increased over the past 60 days.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Textron’s 2026 sales and EPS implies year-over-year growth of 4.9% and 6.6%, respectively. The EPS estimates for 2026 and 2027 have declined over the past 60 days.
Image Source: Zacks Investment Research
Valuation of GE & Textron
GE is trading at a forward 12-month price-to-earnings ratio of 36.36X, close to its median of 35.78X over the last five years. Textron’s forward earnings multiple sits at 10.88X, lower than its median of 13.45X over the same time frame.
Image Source: Zacks Investment Research
Final Take
GE Aerospace’s strong momentum in the commercial and defense aerospace markets, driven by strong demand for LEAP, GEnx and GE9X engines, higher engine deliveries and major engine orders, bodes well for growth. Given the strength across its commercial and defense businesses, GE continues to return cash to shareholders through dividends and share repurchases.
In contrast, Textron’s strength in commercial and defense aerospace markets, along with solid backlogs across its Bell and Textron Systems businesses, favors well for its growth. Its share repurchases and balance-sheet capacity are added strengths. However, this has been marred by manufacturing inefficiencies, component shortages and an unfavorable business mix, which might affect its near-term performance.
Despite its steeper valuation, GE holds robust prospects due to stronger estimates, stock price appreciation and better prospects for sales and profit growth. Given these factors, GE seems a better pick for investors than Textron currently. While GE carries a Zacks Rank #2 (Buy), Textron currently has a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.