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GE Aerospace (GE) - free report >>
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GE Aerospace (GE) - free report >>
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Buy GE Aerospace (GE) Stock After Strong Q4 Earnings?
Emerging as a separate public company following the spinoff of its alternative energy segment GE Vernova (GEV - Free Report) in April 2024, GE Aerospace’s (GE - Free Report) expansion is very compelling as a provider of jet engines, components, and integrated systems.
Able to crush Q4 earnings expectations last Thursday, let’s see if it's time to buy GE Aerospace stock for more upside.
GE’s Strong Q4 Results
GE Aerospace posted Q4 earnings of $1.32 a share, crushing the Zacks EPS Consensus and the company’s previous year mark of $1.03 by 28%. This came on adjusted revenue of $9.87 billion which comfortably exceeded estimates of $9.53 billion and rose 16% year over year.
Appearing to be firing on all cylinders, GE Aerospace’s total orders were up 46% during Q4. The company also highlighted that it had received orders for more than 4,600 commercial and defense engines, including commitments from American Airlines (AAL - Free Report) , British Airways, and the Polish Armed Forces.
Image Source: Zacks Investment Research
GE’s Positive Guidance
Offering FY25 EPS guidance for what would be its first full year as an independent company, GE Aerospace expects earnings of $5.10-$5.45 per share. This came in range of the current Zacks EPS Consensus of $5.22 or 13% growth. Furthermore, GE Aerospace projects another year of low double-digit revenue growth.
Image Source: Zacks Investment Research
GE Dividend Hike
Expecting to generate $6.3 billion-$6.8 billion in free cash flow this year, GE Aerospace plans to raise its dividend by 30% with its annual yield currently at 0.57% or $1.21 per share. Additionally, GE Aerospace plans to increase its share repurchases to $7 billion.
Image Source: Zacks Investment Research
Takeaway
There was a lot to like about GE Aerospace’s Q4 report and outlook, but for now, GE lands a Zacks Rank #3 (Hold). Already spiking +15% year to date, more upside for GE may depend on what is hopefully a trend of positive earnings estimate revisions in the coming weeks.
That said, GE Aerospace has made itself a more appealing long-term investment after announcing an increase to its dividend and share repurchase plan.