GE Aerospace Rallies 51.5% in a Year: Is the Stock Still Worth Buying?

GE Aerospace’s GE investors have been witnessing impressive gains from the stock of late. Shares of the leading designer and producer of jet engines have surged 51.5% in the past year, outpacing the S&P 500 composite and industry’s growth of 16.9% and 28.2%, respectively. The company has also outperformed other industry players like General Dynamics Corporation GD and Textron Inc. TXT, which have returned 39.6% and 29.6%, respectively, over the said time frame.

GE Outperforms the Industry, S&P 500 & Peers

Closing at $316.33 on Tuesday, the stock is trading close to its 52-week high of $332.79 but significantly higher than its 52-week low of $159.36. Also, the stock is trading above both its 50-day and 200-day moving averages, indicating solid upward momentum and price stability. This reflects a positive market sentiment and confidence in the company's financial health and long-term prospects.

GE Shares’ 50-Day and 200-Day SMA

What’s Behind GE Stock’s Momentum?

GE Aerospace is benefiting from a growing installed base and higher utilization of engine platforms, driven by strong momentum and growth across commercial & defense sectors. Solid demand for LEAP, GEnx & GE9X engines and services, supported by growth in air traffic, fleet renewal and expansion activities, is proving beneficial for the Commercial Engines & Services business. During 2025, the company secured more than 500 engine wins at the Dubai Airshow, including deals from flydubai for GEnx engines and Riyadh Air for LEAP-1A engines.

It also inked a deal with Qatar Airways to supply more than 400 GE9X and GEnx engines. It represents the largest widebody engine deal in GE Aerospace’s history. The Commercial Engines & Services business’ revenues and orders jumped 24% and 35%, respectively, on a year-over-year basis in 2025.

Growing popularity for the company’s propulsion & additive technologies, critical aircraft systems and aftermarket services in the defense sector is driving GE’s Defense & Propulsion Technologies business’ performance. During 2025, the company secured a $5 billion contract from the U.S. Air Force to supply F110 engines, parts and support services as part of a Foreign Military Sales (FMS) program. Also, GE received an Indefinite Delivery Indefinite Quantity (IDIQ) contract from the U.S. Army to supply F110 engines for F-15 and F-16 jets. The Defense & Propulsion Technologies business’ revenues increased 11% year over year and orders grew 19% in 2025.

For 2026, GE Aerospace expects adjusted revenues to increase in the low-double-digit range, including mid-teens growth in the commercial engines and services unit and mid-to-high single-digit growth in the defense and propulsion technologies unit.

GE remains committed to making investments to boost growth. For instance, the company has been on track to invest more than $1 billion in its MRO facilities around the world over the next five years. This includes the acquisition of a dedicated LEAP test cell (investing approximately $500 million out of $1 billion), which will unlock a major constraint in its shop visit output.

Its commitment to rewarding its shareholders through dividends and share buybacks is encouraging, too. In 2025, the company paid dividends of $1.45 billion, up 44.1% year over year, to its shareholders. In the same period, it bought back shares for $7.4 billion.

Valuation Remains an Overhang

GE Aerospace is trading at a forward 12-month price-to-earnings (P/E) ratio of 41.77X, higher than the industry average of 32.55X. This elevated valuation could make the stock vulnerable to further pullbacks if market sentiment sours.

In comparison with GE’s valuation, its peers, General Dynamics and Textron, are trading cheaper. Notably, General Dynamics and Textron are currently trading at 21.27X and 14.45X, respectively.

Earnings Estimate Revision

Earnings estimates for GE have increased over the past 60 days. The Zacks Consensus Estimate for 2026 earnings is pegged at $7.45 per share, indicating year-over-year growth of 17%. The consensus mark for 2027 earnings is pinned at $8.55 per share, suggesting year-over-year growth of 14.8%.

Should You Invest in GE Stock Now?

GE Aerospace’s solid foothold and persistent strength in the commercial and defense aerospace markets, driven by solid build rates, wide-body aircraft demand and robust defense budget, bode well for growth. Given the strength in most of its served markets, GE has built a sound liquidity position that supports its shareholder-friendly policies.

Despite its expensive valuation, given the positive analyst sentiment and its growth prospects, the time appears right for potential investors to bet on this Zacks Rank #1 (Strong Buy) company. You can see the complete list of today’s Zacks #1 Rank stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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