UBS raises GE Aerospace price target to $216, maintains buy

Wednesday, on the heels of a robust financial report, UBS analyst Gavin Parsons (NYSE:PSN) raised the price target on GE Aerospace (NYSE:GE) stock to $216 from $207, while reaffirming a Buy rating. Parsons highlighted GE’s performance, which surpassed the high expectations set for the company, both in its quarterly results and future guidance. According to InvestingPro data, GE currently trades at $194.86, with analyst targets ranging from $185 to $261. The company maintains a strong Buy consensus rating of 1.4, with 8 analysts recently revising their earnings estimates upward.

GE Aerospace has demonstrated resilience by maintaining its guidance despite facing a $500 million impact from tariffs, anticipated slower global flight activity, and postponed parts and engine deliveries to China. The company’s ability to navigate these challenges is attributed to a combination of tariff-based surcharge pricing and cost reduction measures. This resilience is reflected in GE’s solid financial metrics, with InvestingPro reporting a 9.49% revenue growth and maintaining a "GOOD" overall financial health score. Parsons noted that if tariffs are relaxed, there could be further upside to UBS’s EBIT estimate, which already exceeds the company’s guidance.

The analyst also pointed out the significant year-over-year growth in Customer & Product Support services orders, which surged by 31%, indicating that the aftermarket is still supply-constrained. This situation is expected to support continued growth throughout the year, even with predictions of a slowdown in global flight growth.

In a scenario where air travel demand wanes, Parsons believes GE Aerospace is still positioned to increase prices and grow its aftermarket business. This optimism is underpinned by the ongoing ramp-up of the LEAP engine and the existing pent-up demand in the market.

Despite potential headwinds from a decelerating pace of global flight activity, UBS’s outlook on GE Aerospace remains positive, with the raised price target reflecting confidence in the company’s ability to sustain growth and manage external pressures effectively.

In other recent news, GE Aerospace reported strong financial results for Q1 2025, with earnings per share of $1.49, surpassing the forecast of $1.25. The company’s revenue reached $9.94 billion, exceeding expectations of $9.14 billion, marking an 11% increase year-over-year. Profit rose by 38% to $2.1 billion, supported by a 12% increase in orders and a commercial services backlog exceeding $140 billion. GE Aerospace continues to anticipate low double-digit revenue growth for the year, despite potential risks from tariff challenges and supply chain issues. In a meeting with President Donald Trump, CEO Larry Culp advocated for the re-establishment of a tariff-free regime for the aerospace industry, emphasizing the benefits of a zero-duty regime for the U.S. economy. The company is also preparing for potential tariff impacts in the second half of the year, with plans to mitigate costs through operational strategies and price adjustments. Furthermore, GE Aerospace’s outlook remains optimistic, with expectations of strong growth in the LEAP engine fleet and commercial services.

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