GE Aerospace Down 15% as Growth, Costs and Valuation Compete
Strong engine demand and a higher cash-flow forecast contrast with rising borrowings, higher costs and a valuation above the industry average.
Key takeaways
- GE shares fell 15% over three months, while the S&P 500 rose 3.2%.
- Second-quarter Commercial Engines & Services revenue increased 27% year over year.
- GE forecast 2026 free cash flow of $8.9 billion to $9.2 billion.
- GE's forward P/E ratio was 34.79X, above the industry's 27.16X average.
GE Aerospace shares fell 15% over the past three months, while the S&P 500 rose 3.2%, according to the Zacks article. As of Friday afternoon, GE traded at $306.15, up 0.17% since the previous close.
Commercial Engines & Services remained a growth driver. In the second quarter, engine deliveries in the segment rose 26% year over year, while revenue increased 27% and orders rose 18%. GE also reported second-quarter revenue growth of 16% in its Defense & Propulsion Technologies segment.
GE forecast 2026 free cash flow of $8.9 billion to $9.2 billion, above its earlier projection. In the first half of 2026, it paid $873 million in dividends and repurchased $4.2 billion of shares.
The article also pointed to risks: GE had $19.2 billion in total borrowings at the end of the second quarter, and second-quarter cost of sales rose 26.7% year over year to $8.7 billion.
GE's forward 12-month price-to-earnings ratio was 34.79X, compared with an industry average of 27.16X. Zacks Consensus Estimates for 2026 and 2027 earnings per share rose 0.6% over the past 60 days, to $7.91 and $9.04, respectively.
This article was produced with the help of AI technology. Source: Yahoo Finance
