General Electric's aerospace division, known as GE Aerospace (NYSE:GE), is preparing to disclose its financial results for the fourth quarter prior to the market opening on Thursday, January 22. Analysts tracking the company's performance anticipate a fourth-quarter earnings per share (EPS) of $1.43, marking an increase over the $1.32 EPS reported in the corresponding quarter last year.
Revenue expectations for the quarter stand at approximately $11.21 billion, reflecting a notable rise from the $9.88 billion recorded in the year-ago period. This forecasted growth underscores the solid momentum GE Aerospace has been maintaining in its business operations and market presence.
In a strategic move to bolster its market position, GE Aerospace announced on January 13 that Delta Air Lines (NYSE:DAL) has chosen its GEnx engines to power a fleet of 30 new Boeing 787-10 aircraft, with an option for an additional 30 planes. This comprehensive agreement encompasses not only the engines themselves but also includes spare units and provisions for long-term service support, ensuring sustained operational reliability for Delta’s expanding fleet.
Following this announcement, GE Aerospace's stock experienced a positive reception, with shares rising by 2% to close at $318.50 on the preceding Wednesday. This price movement reflects investor confidence in the company's contracts and future earnings potential.
Investor interest is further informed by analyses from several of Wall Street's highly regarded and historically accurate equities analysts. Their recent assessments and adjustments to GE Aerospace's valuation provide insight into the stock’s expected trajectory.
UBS analyst Gavin Parsons upheld a Buy rating on GE Aerospace as of January 15, setting a price target increase from $366 to $368. Demonstrating a solid track record with an accuracy rate of 75%, Parsons' confidence signals strong anticipated performance.
Similarly, Citigroup's John Godyn maintained a Buy rating on January 13 but adjusted the price target downward slightly from $386 to $378. Godyn's accuracy rate of 67% suggests a degree of cautious optimism while acknowledging market dynamics.
On December 12, Susquehanna's Charles Minervino initiated coverage of GE Aerospace with a Positive rating and a price target of $386. Minervino's 74% accuracy rate lends credence to this initial outlook, indicating potential upside for investors.
Bank of America Securities analyst Ronald Epstein, on October 27, sustained a Buy rating and significantly raised the price target from $310 to $365, supported by an accuracy rate of 72%. Epstein’s upward revision reflects a reassessment of the company’s growth trajectory.
Further support comes from JP Morgan analyst Seth Seifman, who retained an Overweight rating on the same date and boosted the price target from $275 to $325. Seifman’s impressive accuracy rate of 86% indicates strong confidence in GE Aerospace's near to medium-term prospects.
These cumulative analyst evaluations provide a nuanced yet optimistic view of GE Aerospace’s outlook, balancing upward revisions with measured caution reflective of market uncertainties.
Correspondingly, Delta Air Lines shares demonstrated stability, closing at $69.14, mirroring the firm’s pivotal role in GE Aerospace’s recent commercial agreements.
Key Points:
- GE Aerospace is projected to report fourth-quarter earnings per share of $1.43, up from $1.32 a year ago.
- Quarterly revenue is expected to reach $11.21 billion, an increase from $9.88 billion in the prior-year period.
- Delta Air Lines has contracted GE Aerospace to supply GEnx engines for 30 Boeing 787-10s, with options for 30 additional aircraft, including long-term maintenance support.
- Prominent Wall Street analysts have maintained buy or positive ratings on GE Aerospace, with price targets adjusted as high as $386.
Risks and Uncertainties:
- Analyst price targets vary, indicating differing views on the stock’s valuation and future performance.
- The slight downward revision by some analysts reflects potential market or operational challenges not fully detailed.
- Reliance on large commercial contracts, such as with Delta Air Lines, makes revenues sensitive to airline industry fluctuations.
- GE Aerospace’s stock price and performance may react to the upcoming earnings report and broader economic factors impacting aerospace demand.