GE Aerospace Receives Strong Buy Rating as Citigroup Raises Price Target by 54%

Citigroup's Andy Kaplowitz raised their price target on GE Aerospace (NYSE: GE) by 54.4% from $120.43 to $186 on 2024/04/26. The analyst maintained their Strong Buy rating on the stock.

GE Aerospace, a digital industrial company known for its wide range of products and services, recently reported its quarterly performance, surpassing expectations and leading to an optimistic outlook for the future. The positive results prompted Citigroup analyst Andy Kaplowitz to revise their price target for GE Aerospace.

In their assessment of GE Aerospace's Q1 2024 earnings report, Kaplowitz highlighted the company's strong performance, stating, "Commercial aftermarket demand remains robust." The analyst pointed out several notable achievements for the quarter, including an EPS of $0.82, surpassing both the Zacks Consensus Estimate of $0.67 and the previous year's Q1 EPS of $0.27 by a significant margin of 203.7%. Revenue for the quarter reached $15.2 billion, beating the Q1 2023 figure of $13.7 billion by 11%. Additionally, GE Aerospace reported a 24% year-over-year increase in operating profit, amounting to $1.5 billion, and a free cash flow of $900 million.

GE Aerospace's segments also showed strong growth during Q1 2024. The Commercial Engines & Services segment experienced revenue growth of 16%, while the Defense & Propulsion Technologies segment saw revenue growth of 18%.

Looking ahead, GE Aerospace's management provided optimistic guidance for FY 2024. They expect EPS to range from $3.80 to $4.05, with an operating profit of $6.2 billion to $6.6 billion. The company anticipates free cash flow to be less than $5 billion. GE Aerospace aims for mid to high teens revenue growth in the Commercial Engines & Services segment, with an operating profit target of $6.1 billion to $6.4 billion. In the Defense & Propulsion Technologies segment, they project mid-single-digits to high-single-digits revenue growth and an operating profit of $1.0 billion to $1.3 billion.

Chairman & CEO H. Lawrence Culp, Jr. expressed satisfaction with the company's performance in Q1 2024, stating, "We marked a new beginning in early 2024/04 with the successful spin-off of GE Vernova and launch of GE Aerospace, completing our multi-year transformation." Culp emphasized the strong results achieved during the quarter, particularly in terms of profit and cash growth for GE Aerospace. He also announced an upward revision of the company's FY profit and free cash flow guidance, reflecting confidence in their solid start to the year and positive outlook for the remainder of 2024.

In addition to the rating change for GE Aerospace, analyst Andy Kaplowitz made adjustments to other stocks in their portfolio. Kaplowitz raised the price target for Vertiv Holdings Co by 7.8%, from $102 to $110, while maintaining a Strong Buy rating. On the other hand, the price target for Fortive Corp was reduced by -3%, from $101 to $98, while the Strong Buy rating was maintained.

GE Aerospace currently enjoys strong support from analysts, with 100% of top-rated analysts rating the stock as a Strong Buy or Buy. No analysts have assigned a Hold rating, and none have recommended selling the stock.

The consensus forecast among analysts predicts that GE will deliver earnings per share (EPS) of $3.79 for the upcoming year. If these predictions hold true, GE's next yearly EPS will experience a substantial increase of 22.6% compared to the previous year.

Since the release of GE Aerospace's Q1 2024 earnings report on 2024/04/23, the stock price has experienced a slight decline of 0.8%. However, on a year-over-year basis, the stock has shown impressive growth, with a 63.8% increase. During this period, GE has outperformed the S&P 500, which has risen by 24%.

Citigroup analyst Andy Kaplowitz is highly regarded in the industry, ranking in the top 1% out of 4,565 Wall Street analysts, according to WallStreetZen. Kaplowitz specializes in various sectors, including Basic Materials and Industrials.

General Electric Company, the parent company of GE Aerospace, is headquartered in Boston, MA, and is renowned for its digital industrial offerings and diverse range of products and services. These include aircraft engines, gas turbines, wind turbines, and medical diagnostic equipment. Following recent divestitures, GE now focuses on the aviation, legacy healthcare, power, and renewable energy sectors. With a history dating back to 1892, GE has established a massive installed base and continues to be a prominent player in the industry.

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