GE Aerospace still ‘premier’ manufacturer after Vernova spin-off - analyst
Published: 12:03 08 Apr 2024 EDT
General Electric Co (NYSE:GE) remains a premier aircraft engine manufacturer after its energy wing, Vernova, was spun off last week, Bank of America analysts have stated.
Given a boom in demand for travel following the pandemic, analysts added the firm was entering a “goldilocks period” with “ample demand to capture”.
“We continue to see GE as a premier opportunity to play both the commercial original equipment ramp, as well as aftermarket in the current commercial aerospace cycle,” the bank said in a note.
Opportunities should arise in both the narrow and wide-body markets on the back of the travel boom, allowing GE to grow its installed fleet of around 44,000 engines.
A majority win rate for its LEAP-1As on short-haul Airbus Group (EPA:AIR) A320neo jets will likely bode well given the plane maker’s 8,600 aircraft-strong order backlog.
Some 4,800 orders for Boeing Co (NYSE:BA, ETR:BCO) jets also provide an opportunity despite delays, analysts added, thanks to GE’s sole-source LEAP-1B engine for the 737 MAX and production ramp of the wide-body 777x.
“GE's Commercial Engines portfolio is entering a sweet spot,” the bank wrote.
Shop visits are set to increase exponentially, potentially taking GE’s LEAP programme beyond break-even to profitability next year and past rival CFM by 2030.
GE was granted a ‘buy’ rating as a result, while its post-spin-off price target was set by Bank of America at US$165, marking a prospective jump of 5% on Friday’s close.
