Jetlinerimages/iStock Unreleased via Getty Images
GE Aerospace (NYSE:GE) rose 1.44% on Monday, ahead of its first-quarter results scheduled on April 22nd, before market open.
The pure-play aviation company has received a slew of rating upgrades since the former industrial conglomerate General Electric became GE Aerospace after the spinoff of its power and renewable-energy business GE Vernova (GEV) earlier this month.
Last year, General Electric’s healthcare business was also spun off into a separate trading company called GE Healthcare (GEHC).
“We believe sentiment will remain bullish as the company benefits from a favorable mix and focus on industry fundamentals and capital allocation,” said RBC Capital Markets.
The brokerage expected GE’s GE90 and the GEnx engines to see strong growth in 2024-2025 as the travel recovery in wide-body aircraft has accelerated back to 2019 levels. GE Aerospace would also benefit from engine parts and servicing demand.
Playing a similar tune, analysts at Goldman Sachs rated the company as a Buy, commenting that the jet engine maker was poised for growth with rebounding demand for new airplanes.
“It’s good to be in the aerospace aftermarket, including the engine business,” according to Goldman. “Engines are a high barrier to entry with limited competition, long-lived assets, maintenance-intensive, highly regulated, critical to flight and contribute a high percentage of the total value of an airplane.”
For the first quarter, the company projects to deliver high-single-digit revenue growth, adjusted EPS of $0.60-$0.65, and free cash flow in line with net income growth. The quarterly results would reflect the legacy General Electric earnings, which would include Vernova.
Meanwhile, Wall Street expects a quarterly EPS of $0.70 (+159.3% Y/Y), along with a revenue of $15.7B (+8.3% Y/Y).
Over the last two years, GE has beaten EPS estimates 88% of the time, and has beaten revenue estimates 75% of the time.
Over the last three months, EPS estimates have seen three upward revisions and three downward. Revenue estimates have seen two upward revisions and zero downward.
