GE Aerospace Shares Ascend to Record Highs Following Strategic Turnaround
GE Aerospace Stock Reaches 25-Year High Amid Commercial Aviation Demand
GE Aerospace (NYSE:GE) shares advanced significantly on Tuesday, September 16, 2025, with the stock climbing to approximately $292. This surge marks the first time in 9,150 days that GE stock has surpassed its intraday highs last observed in August 2000, signaling a notable milestone for the aerospace unit following its strategic turnaround.
The Event in Detail: A Quarter-Century Peak
The market's positive reaction reflects investor confidence in GE Aerospace's revitalized operational and financial health. The stock's ascent to $292 represents a substantial reward for the multi-year transformation spearheaded by CEO Larry Culp. Since joining in late 2018, Culp orchestrated a significant recovery, including the reduction of approximately $100 billion in debt and a concerted effort to simplify operations, sharpening the company's focus on its core aerospace business.
Underpinning this rally is the robust demand in the commercial aircraft market. Industry giants Boeing and Airbus currently hold substantial backlogs, totaling roughly 14,000 jets on order. A considerable share of these new aircraft are powered by GE's engines or those from its joint ventures, which consequently ensures a sustained flow of high-margin aftermarket and engine-service revenue for GE Aerospace.
Analysis of Market Reaction: Operational Excellence and Financial Strength
Investors are responding to evidence of stronger cash flow and a clearer growth trajectory for the aerospace business. Culp's tenure has been characterized by a comprehensive financial and operational overhaul, which not only strengthened GE's balance sheet but also contributed to a 20% growth in profit, a doubling of adjusted earnings-per-share, and a quadrupling of market capitalization for the conglomerate before its divestitures.
The strategic streamlining of GE's portfolio culminated in the successful creation of three independent public companies: GE HealthCare, GE Vernova, and GE Aerospace, which collectively amplified shareholder value nearly fivefold.
GE Aerospace's second-quarter 2025 results further validated this positive sentiment, reporting GAAP revenue of $11.0 billion, a 21% increase, and adjusted revenue of $10.2 billion, up 23%. GAAP EPS climbed 56% to $1.87, with adjusted EPS rising 38% to $1.66. Notably, free cash flow nearly doubled, reaching $2.1 billion, up 92%.
The company has also raised its 2025 guidance and 2028 outlook, now anticipating an operating profit of approximately $11.5 billion and free cash flow of around $8.5 billion by 2028. Furthermore, GE Aerospace plans to enhance shareholder returns, committing approximately $24 billion in capital distributions from 2024 to 2026.
Broader Context and Implications: A Booming MRO Market
The strong performance of GE Aerospace occurs within a dynamic aerospace sector facing both robust demand and lingering supply chain challenges for aircraft manufacturers. Despite these constraints, GE Aerospace has adeptly transformed supply chain bottlenecks and an aging global airline fleet into strategic tailwinds for its lucrative services business.
Initiatives such as the FLIGHT DECK program, a supplier-focused effort, have led to an 8% sequential improvement in material inputs in early 2025. This agility directly fueled a 17% year-over-year revenue growth in the services segment during Q1 2025. A $1 billion investment in U.S. manufacturing and supply chain resilience in 2025 further underscores the company's proactive approach.
The global airline fleet's average age, which has risen to 13.4 years in 2025, is propelling a "super cycle" in the Maintenance, Repair, and Overhaul (MRO) market. This market is projected to expand at a 2.7% compound annual growth rate (CAGR) through 2035, potentially reaching $156 billion. GE Aerospace is exceptionally positioned to capitalize on this trend, holding a 32% market share in turbofan engine maintenance, with its GENX engine family alone forecasted to generate $52 billion in MRO demand over the next decade. The company's backlog, now exceeding $175 billion, provides substantial revenue visibility for years to come.
Expert Commentary: Sustained Momentum and Raised Expectations
Analysts note that while GE Aerospace's current market value is still below the peak of the former unified GE, the combined valuation with GE Vernova and GE HealthCare approaches previous scales, with many price targets now exceeding the current stock levels. This suggests continued upside potential for the stock.
H. Lawrence Culp, Jr., Chairman and CEO of GE Aerospace, affirmed the company's strong trajectory:
> "The GE Aerospace team delivered an excellent second quarter with free cash flow nearly doubling and more than 20% growth in orders, revenue, operating profit, and EPS. We are raising our 2025 guidance and 2028 outlook, with our operating performance and robust commercial services outlook underpinning our higher revenue, earnings, and cash growth expectations."
Rahul Ghai, CFO, echoed this sentiment, stating:
> "We had a strong second quarter, with improvement across all key metrics... Backlog is at record levels."
Looking Ahead: Continued Growth in Aerospace
The factors driving GE Aerospace's record performance—strong commercial demand, effective leadership, and a robust services market—are expected to maintain relevance in the coming periods. The company anticipates low-double-digit revenue growth through 2028, with profit expansion primarily driven by higher services volume, even as it navigates potential headwinds from GE9X costs and research and development spending.
While supply chain constraints might persist into 2026, GE Aerospace's strategic investments and leadership in engine durability kits position it favorably to mitigate these risks and potentially outpace competitors. Industry demand and disciplined execution remain critical drivers for GE Aerospace's continued success and the broader aerospace and defense sector outlook in the near to medium term. Upcoming economic indicators and policy decisions will be closely monitored for their potential influence on market dynamics.
Edgen Stock·Sep 13 2025, 18:50
