At 11:30 a.m. ET today, shares of GE Aerospace (NYSE: GE) were up 6%. Following a few updates from major financial institutions, the once-General Electric corporation surged.
Analyst updates from GE Aerospace Being a separate aerospace and defense firm rather than a division of a multi-industry industrial conglomerate means that Wall Street analysts will have plenty on their plates. This indicates that aerospace analysts, not industry specialists, will likely be covering the stock.
Because of this, an analyst at Barclays assumed coverage of the stock, setting a price target of $185 and giving it an overweight rating.
German financial firm Deutsche Bank also reduced GE Aerospace's price objective from $210 to $190 in light of the separation of GE Vernova (NYSE: GEV). To put that new goal in perspective, though, GE Vernova is worth about $35 in "old GE" stock because it trades at $140 and GE shareholders received one share of GE Vernova for every four shares of General Electric.
Also, compared to where it is now, the $190 price goal is a 31% premium. Whatever your perspective may be, the consensus among Wall Street analysts is that GE Aerospace has bright future prospects.
Reason enough to do so: CFM International, a GE-Safran joint venture, is aggressively increasing output of its LEAP engines, and the commercial aerospace recovery is showing no signs of slowing down.
Aeroplanes with narrow bodies, such as the Comac C919, the Airbus A320 neo, and the Boeing 737 MAX, utilize the LEAP engine. Investors should brace themselves for a profitable aftermarket that will last for decades.
In addition, GE Aerospace can steal market share from RTX because of the requirement to test the geared turbofan engines (an option on the Airbus A320 neo series) made by RTX (Pratt & Whitney) for possible contamination. It bodes well for the most well-managed aerospace firm in the large-cap market.
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