CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:
Our 12-month target price remains $124, a 28.8x multiple applied to our revised 2024 EPS estimate. The applied multiple is in line with the average valuation in our aerospace universe coverage, as GE increasingly gets closer to a spin-off of GE Vernova, its Renewables and Power business, which would render GE as a pure-play aerospace firm. We raise our 2023 EPS estimate by $0.29 to $2.62 but trim 2024’s by $0.12 to $4.30. Q3 EPS of $0.82 vs. $0.35, beat the consensus view by $0.26. On the one hand, secular tailwinds for a revamped aerospace replacement cycle are strong and support demand for GE’s aircraft engines (including the LEAP engine). On the other hand, internal supply chain problems, plus quality control woes at both Boeing (BA 183 ***) and Airbus (AIR FP EUR125 *****), likely mean slower near-term growth potential than it otherwise could be. GE has guided to a spin-off in Q2 2024 and aerospace order growth looks good, but execution is going to remain key. Shares yield 0.3%.