GE Aerospace (GE): A Bull Case Theory

We came across a bullish thesis on GE Aerospace on Monopolistic Investor’s Substack by Antoni Nabzdyk. In this article, we will summarize the bulls’ thesis on GE. GE Aerospace's share was trading at $282.27 as of September 4^th. GE’s trailing and forward P/E were 39.36 and 40.49 respectively according to Yahoo Finance.

GE Aerospace (GE) emerged as a standalone company in 2024 after General Electric spun off its divisions into GE Vernova, GE Healthcare, and GE Aerospace, with the latter inheriting the CEO’s focus and driving strong market confidence. The company’s business model revolves around designing high-performance airplane engines and securing long-term service contracts with airlines and governments, often spanning decades, which creates tremendous lifetime customer value. Approximately 70% of GE’s revenue comes from service-based activities, including maintenance and repairs, which are high-margin, recurring, and less capital-intensive than engine manufacturing.

This model differentiates GE from peers in industrials like CAT or Deere, which rely more heavily on cyclical order backlogs, and provides consistent cash flow that underpins its strong free cash flow (FCF) generation. In 2024, GE reported gross and net margins of 31.6% and 18.4%, respectively, with R&D investments steadily increasing to support innovations in safety and efficiency, demonstrating disciplined allocation of capital toward value-generating initiatives.

The company benefits from significant monopolistic traits, including high barriers to entry, economies of scale, and a singular product focus, making it a preferred partner for airlines and governments. Its competitive positioning is reinforced by a $140 billion order backlog, global brand trust, and exclusive focus on engines rather than diversified industrial products. Financially, GE maintains a net equity of $19.35 billion and a strong FCF margin of 17.4%, though a moderate debt load and asset turnover suggest some operational constraints.

Conservative Discounted Cash Flow (DCF) analysis, assuming 10–15% annual revenue growth, indicates a fair value of $322 per share, implying upside potential of 17% from current levels. Even with slower growth, downside is contained, highlighting limited risk relative to return potential. With durable contracts, recurring revenue streams, and strategic R&D, GE Aerospace presents a compelling investment opportunity in industrials, offering both stability and long-term growth potential.

Previously we covered a bullish thesis on GE Aerospace by Asymmetric Ventures in May 2025, which highlighted the company’s strong MRO services, long-term engine contracts, and operational efficiency under CEO Larry Culp. The stock has appreciated approximately 16.7% since our coverage. Antoni Nabzdyk shares a similar thesis but emphasizes the standalone spin-off, detailed financial metrics, and DCF-based valuation upside.

GE Aerospace is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 104 hedge fund portfolios held GE at the end of the first quarter which was 101 in the previous quarter. While we acknowledge the potential of GE as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.