GE Aerospace (GE) PT Raised to $405 at Bernstein SocGen Group

Bernstein SocGen Group analyst Douglas S. Harned raised the price target on GE Aerospace (NYSE: GE) to $405.00 (from $374.00) while maintaining a Outperform rating.

The analyst comments "We are raising our target to $405 with an increasingly positive outlook for GE Aerospace. In Commercial Engine & Services, we raise our estimates for widebody services, with higher content and pricing on GEnx and GE90. On narrowbody services, we continue to see CFM56 shop visits above 2,300 through at least 2030, as capacity constraints and high demand push shop visits out. We see LEAP services revenues reaching CFM56 levels by 2030, with margin expansion driven by new contract structures (reset LTSAs or time & materials). This sets up LEAP services as a long-term source of growth with attractive margins. In CES for OE, supply chain is improving for LEAP deliveries. On its Q4 earnings, Airbus said CFM now was on track to meet engine delivery commitments. With only 4% of the fleet grounded, there is less pressure to deliver spare engines. The GE9X represents a substantial source of losses, which we see expanding to roughly $1bn as a peak in 2030. But, one should remember that this program should be positive NPV from here with 634 777X airplanes currently in backlog, making these losses a short-term investment. Our estimates for Defense & Propulsion Technologies are higher now with the inclusion of the aero derivatives business (moved from CES). We expect aero derivatives to have low double digit growth as it responds to AI-driven energy demand. Separately, the outlook for defense is more positive. We are slightly above consensus estimates for 2026 (Adj. EPS of $7.47 vs. $7.40, Adj. FCF of $8.33bn vs. $8.28bn). But, we are well above consensus for 2028 (Adj. EPS of $10.39 vs. $9.47, Adj. FCF of $10.9bn vs. $9.7bn). The difference is driven by higher expectations for CES revenues and margins."

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