Value
2.6/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 2.8 |
| P/S | 5.0 |
| EV/EBITDA | 0.0 |
| Fwd P/E | 2.7 |
| PEG | 1.0 |
| Analyst target | 4.0 |
- ▸Forward P/E: 41.3x
- ▸PEG: 8.57
- ▸Expensive valuation
GE · Why this verdict
Why GE Aerospace (GE) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score5.2/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
GE Aerospace combines an exceptional earnings beat track record with best-in-class margins and 25% revenue growth, but a forward P/E of 37.1 times and minimal headroom to the near-term price target leave the current setup unattractive — the business quality is not in question, the entry point is.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Strong margins of 18% and ROE of 45% rank superior to peers in both quality and return metrics, placing the business at the top of its peer group on profitability. Peer rank | Operating margin sustaining above 16% and ROE above 35% over the next 12 months. | →Stable |
| CounterA debt-to-equity ratio of 1.2 means the ROE figure is partly amplified by financial leverage — if debt costs rise or earnings disappoint, return metrics could compress faster than the headline numbers imply, and the leverage penalty already weighs on the overall investment case. | ||
GE Aerospace has beaten consensus EPS estimates in each of the last four quarters with an average surprise of roughly 26%, demonstrating a sustained pattern of under-promising and over-delivering on its fundamental trajectory. Earnings | Continued above-consensus EPS results over the next four quarters, with positive surprises remaining above 10% on average. | →Stable |
| CounterThe average 26% beat is heavily skewed by a single 46% outlier quarter; the most recent result, while still a beat at 16%, is narrowing, suggesting guidance is becoming better calibrated and the magnitude of future positive surprises may diminish. | ||
A forward P/E of 37.1 times and a PEG of 7.89 signal an expensive valuation with minimal headroom to the near-term price target, leaving the setup unfavorably skewed — the reward-to-risk ratio at current prices does not justify adding exposure. Valuation breakdown | If the valuation normalizes, the forward P/E will compress below 30 times as earnings grow into the multiple or the price consolidates. | →Stable |
| CounterA perfect four-quarter beat streak with an average 26% positive surprise demonstrates the company has repeatedly delivered above the estimates that feed the multiple; if earnings acceleration continues, the expensive valuation may compress organically over time. | ||
Revenue grew 25% year-over-year with rising volume accumulation and the stock trading above its 200-day moving average, indicating the fundamental growth story is intact and being recognized by the market. Growth breakdown | Revenue growth sustaining above 20% year-over-year over the next 2-4 quarters. | →Stable |
| CounterFree cash flow at only 66% of net income flags that reported earnings growth is not fully converting into cash; if this shortfall persists, the capital available for reinvestment or shareholder returns may be more constrained than the top-line growth rate implies. | ||
Strong margins of 18% and ROE of 45% rank superior to peers in both quality and return metrics, placing the business at the top of its peer group on profitability.
→StablePeer rank
- Expectation
- Operating margin sustaining above 16% and ROE above 35% over the next 12 months.
CounterA debt-to-equity ratio of 1.2 means the ROE figure is partly amplified by financial leverage — if debt costs rise or earnings disappoint, return metrics could compress faster than the headline numbers imply, and the leverage penalty already weighs on the overall investment case.
GE Aerospace has beaten consensus EPS estimates in each of the last four quarters with an average surprise of roughly 26%, demonstrating a sustained pattern of under-promising and over-delivering on its fundamental trajectory.
→StableEarnings
- Expectation
- Continued above-consensus EPS results over the next four quarters, with positive surprises remaining above 10% on average.
CounterThe average 26% beat is heavily skewed by a single 46% outlier quarter; the most recent result, while still a beat at 16%, is narrowing, suggesting guidance is becoming better calibrated and the magnitude of future positive surprises may diminish.
A forward P/E of 37.1 times and a PEG of 7.89 signal an expensive valuation with minimal headroom to the near-term price target, leaving the setup unfavorably skewed — the reward-to-risk ratio at current prices does not justify adding exposure.
→StableValuation breakdown
- Expectation
- If the valuation normalizes, the forward P/E will compress below 30 times as earnings grow into the multiple or the price consolidates.
CounterA perfect four-quarter beat streak with an average 26% positive surprise demonstrates the company has repeatedly delivered above the estimates that feed the multiple; if earnings acceleration continues, the expensive valuation may compress organically over time.
Revenue grew 25% year-over-year with rising volume accumulation and the stock trading above its 200-day moving average, indicating the fundamental growth story is intact and being recognized by the market.
→StableGrowth breakdown
- Expectation
- Revenue growth sustaining above 20% year-over-year over the next 2-4 quarters.
CounterFree cash flow at only 66% of net income flags that reported earnings growth is not fully converting into cash; if this shortfall persists, the capital available for reinvestment or shareholder returns may be more constrained than the top-line growth rate implies.
Per-dimension breakdown
Quality
6.0/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 10.0 |
| ROA | 3.2 |
| Gross margin | 2.2 |
| Op margin | 8.1 |
| Net margin | 8.9 |
| Current ratio | 4.0 |
| FCF quality | 5.0 |
| Moat | 6.0 |
| Piotroski F | 6.7 |
- ▸Excellent ROE: 45%
- ▸Strong margins: 18%
- ▸Earnings quality warning: 66% FCF/NI
Growth
5.1/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 8.7 |
| EPS growth | 1.6 |
- ▸Strong growth: 25% YoY
Momentum
2.5/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 0.0 |
| OBV | 1.0 |
| MA position | 6.0 |
| Volume | 0.0 |
- ▸Volume distribution (falling OBV)
- ▸Above 200-day MA
Sentiment
6.7/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 5.0 |
| Analyst rating | 9.0 |
| Price target | 5.5 |
Insider
7.3/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 10.0 |
| notable moves | 7.0 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
- ▸Institutions accumulating
Peer rank
5.3/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 4.1 |
| quality rank | 9.3 |
| growth rank | 6.4 |
- ▸Superior ROE vs peers
- ▸Best-in-class margins
Technical
5.9/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 5.2 |
| support resistance | 3.7 |
| 52w position | 8.8 |
Risk (lower is worse)
6.1/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 9.3 |
| days to cover | 7.9 |
| volatility | 5.9 |
| put call | 5.5 |
| implied vol | 4.7 |
| beta | 5.6 |
| debt equity | 4.7 |
| news risk | 5.5 |
- ▸Concentration risks: 2 MED (10-K Item 1A)
Catalyst
7.6/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 9.4 |
| dividend safety | 8.5 |
| news activity | 8.0 |
- ▸Perfect beat streak: 4Q
- ▸Earnings in 5 days
- ▸Dividend aristocrat: 0.5% yield
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (4)
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (3)
- MOMENTUM:2.5<4.5
- ASYMMETRY:-0.6=NEGATIVE
- EARNINGS_PROXIMITY:5d<=7d
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
-0.61
Upside
-6.8%
Downside
11.1%
Sizing output
AVOID
SetupRange Bound — RSI 52 mid-range, Bollinger mid-band
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — Beta 1.35>1.3
Investment implication
The F-path SELL output reflects an overall score of 4.7 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Catalyst at 7.6) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( MOMENTUM:2.5<4.5, ASYMMETRY:-0.6=NEGATIVE, EARNINGS_PROXIMITY:5d<=7d) reinforce the read. Current asymmetry R:R is -0.61 — supplementary context, not the trigger for this path.
The strongest dimensions are Catalyst at 7.6, Insider at 7.3, and Sentiment at 6.7; the weakest are Momentum at 2.5, Value at 2.6, and Growth at 5.1. The V9 engine flagged 3 failed gates with 1 warning, producing an asymmetric reward-to-risk of -0.61 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Exceptional Earnings Beat Cadence
Trip ifEPS surprise falls below 0% for 2 consecutive quarters.
- P2Best In Class Margin Profile
Trip ifOperating margin falls below 15% from current 18%.
- P3Rich Valuation Unfavorable Setup
Trip ifForward P/E compresses below 25 times.
- P4Strong Revenue Growth Trajectory
Trip ifRevenue growth falls below 15% YoY for 2 consecutive quarters.