GE Aerospace (GE, Financial) saw its stock rise by 2.5%, reaching a price of $202.03. This increase follows the company's announcement of a notable contract with the U.S. Air Force, which is valued at up to $5 billion for supplying F110-GE-129 engines. These engines are integral to F-15 and F-16 aircraft used by the U.S. and its allies globally.
GE Aerospace, a leader in aerospace and defense and a core component of the broader General Electric, boasts an impressive market cap of $215.48 billion. The company's F110 engine, with over 11 million flight hours, underscores its longstanding reliability and performance. This aligns well with recent company comments emphasizing the F110 as a preferred choice for military fleets.
Despite the stock's upward movement, certain valuation metrics suggest caution. GE Aerospace's current price-to-earnings (PE) ratio stands at 33.73, and its price-to-book (PB) ratio is close to a 10-year high at 11.22. Furthermore, the GF Value indicates that GE is "Significantly Overvalued," with a GF Value estimate of $130.92. You can explore this further on the GF Value page.
In terms of financial health, GE Aerospace's financial strength and profitability scores reveal a mixed picture. The Altman Z-score of 2.76 suggests some financial stress, albeit not critical. On the positive side, its operating margin is expanding, and the dividend yield is near a 2-year high, highlighting potential for income-focused investors.
Looking at growth metrics, GE Aerospace's revenue growth has faced challenges, with a decline in revenue per share over the past five years. Nonetheless, the company's recent 44% EBIT growth and significant earnings boost signal potential operational improvements.
Overall, GE Aerospace (GE, Financial) remains a prominent player in the aerospace and defense sector. However, investors should weigh the company's strong operational features against its current overvaluation and financial warning signs.
