GE Aerospace: A Financial Gem Unearthed

Wells Fargo Foresees Increased Profitability

GE Aerospace (NYSE:GE) is set to exceed previous profit estimates this year, according to analysts at Wells Fargo. The financial-services firm has adjusted its forecast for the renowned jet engine manufacturer to reflect a more promising outlook.

“We continue to see GE’s 2024 guidance as beatable and raise our estimate by about $0.02 as we assume fewer loss-making new engine deliveries,” shared Matthew Akers, an analyst at Wells Fargo, in a report dated June 28.

Resilience Amid Aviation Industry Concerns

Amid concerns among investors regarding jet engine manufacturers, especially following Airbus’ reduction of plane delivery targets for the year, GE Aerospace stands out. Given that engine makers derive the majority of their profits from the aftermarket for parts and maintenance, they enjoy a certain level of insulation from fluctuations in new-engine deliveries, as highlighted by Wells Fargo.

Revised Estimates and Future Projections

While Wells Fargo has increased its earnings estimate for GE Aerospace for the year ahead, the bank has revised down its estimate for the second quarter that just concluded.

“We are trimming GE Q2 sales estimate by about 5% due to fewer engine deliveries. Our 2024 EPS estimate, however, moves higher on account of reduced loss-making deliveries, with no significant impact anticipated on the aftermarket segment of GE’s commercial engines business,” stated Wells Fargo.

In the same report, Wells Fargo also adjusted its earnings estimate for RTX, a company with a jet engine manufacturing unit under the name Pratt & Whitney.

Updated Projections for GE Aerospace