GE Aerospace (GE) stock surged Thursday after the global aerospace company beat top- and bottom-line expectations for its fourth quarter and issued a strong outlook for 2025.
In the three months ending December 31, GE's revenue increased 15.6% year over year to $9.9 billion. Its earnings per share (EPS) more than doubled from the year-ago period to $1.32.
"GE Aerospace delivered a strong finish to 2024 given robust demand for our services and products with fourth quarter orders up 46%, EPS more than doubling, and free cash flow increasing over 20%," said GE Aerospace CEO Larry Culp in a statement. "Our performance capped off a monumental first year as a standalone company with $1.7 billion of profit growth and $1.3 billion of free cash flow growth."
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The results topped analysts' expectations. Wall Street was anticipating revenue of $9.5 billion and earnings of $1.04 per share, according to Investor's Business Daily.
For the full fiscal year, GE said it expects to achieve revenue growth in the low-double-digit percentages from 2024 and EPS in the range of $5.10 to $5.45, ahead of analysts' expectations of 11% revenue growth and earnings of about $5.23 per share.
"Looking to 2025, we expect double-digit revenue and EPS growth with greater than 100% free cash flow conversion," Culp said. "Guided by Flight Deck, our proprietary lean operating model, I'm confident in our ability to accelerate output and deliver for our customers."
Is GE stock a buy, sell or hold?
GE Aerospace has generated a total return (price appreciation plus dividends) of 81% over the trailing 12 months vs 27% for the S&P 500. And Wall Street is still very bullish on the industrial stock.
According to S&P Global Market Intelligence, the average analyst target price for GE stock is $208.60, representing implied upside of over 4% to current levels. Additionally, the consensus recommendation is a Strong Buy.
Financial services firm Bernstein has an Outperform rating (equivalent to a Buy) and $209 price target on the large-cap stock.
"We continue to expect GE to benefit from favorable demand trends for both aftermarket and original equipment," wrote Bernstein analyst Douglas Harned in a January 19 note. However, he does note risks facing the company, which include the potential for slowed growth in the high-margin aftermarket and global airline overcapacity.
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