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- GE 3Q25 - Flight deck clear for takeoff? Bull $400. Bear $220
GE 3Q25 - Flight deck clear for takeoff? Bull $400. Bear $220
Cheat Sheets
GE AEROSPACE (GE)
✈️ Global Engine Leader | Q3 EPS $1.66 (Beat +44%) | Orders Up 2% | Revenue $11.3B (+26%) | Guidance Raised
Op Profit $2.3B (+26%) | Op Margin 20.3% (Flat) | FCF $2.4B (+30%, 130% Conv) | LEAP +40% | Backlog $175B
💰 Market Cap: $323B | 🏢 53k Employees | 🌐 Powers 75% of Commercial Flights
👨💼 CEO Larry Culp | 🎯 LEAP Engine Ramp | 🇺🇸 Evendale, OH
$303
📈 +$2.54 (+0.85%) Today
+90% YTD | Near All-Time High
Price Targets (18 Months)
Current Price: $303
$400
Bull Case (+32%)
Perfect Execution
🚀 Needs:
LEAP hits 2,500/yr by 2028 • Services backlog converts fast • GE9X ramps • Supply chain fixed • Air travel stays hot
$360
Base Case (+19%)
Steady Execution
⚖️ Needs:
Hit 2025 guidance • LEAP +15-20% • Backlog stays • Supply chain improves • No recession
$220
Bear Case (-27%)
Cycle Turns + Miss
⚠️ Risk:
Recession hits • LEAP delays • 777X pushed again • Multiple compression 35x→25x P/E
The TL;DR
💰 What Happened
• Q3 EPS: $1.66, +44% YoY (crushed it)
• Revenue $11.3B, +26% | Op Profit $2.3B, +26%
• LEAP deliveries: RECORD Q3, +40% YoY
• Services revenue +28% (high margin recurring $$$)
• FCF $2.4B, 130% conversion (printing money)
• Full year guidance RAISED across the board
• Revenue $11.3B, +26% | Op Profit $2.3B, +26%
• LEAP deliveries: RECORD Q3, +40% YoY
• Services revenue +28% (high margin recurring $$$)
• FCF $2.4B, 130% conversion (printing money)
• Full year guidance RAISED across the board
✅ Bull Case
• Services +28%, shop visits +33% = recurring revenue machine
• $175B backlog = multi-year visibility locked in
• LEAP deliveries +40% Q3, +20% full year (RECORD)
• Suppliers shipping 95%+ (3rd straight quarter)
• Material inputs +35% YoY = production ramping
• Defense +83% YoY (massive growth)
• Sold out on LEAP/GE9X through 2029
• Korean Air mega order: 103 aircraft
• $175B backlog = multi-year visibility locked in
• LEAP deliveries +40% Q3, +20% full year (RECORD)
• Suppliers shipping 95%+ (3rd straight quarter)
• Material inputs +35% YoY = production ramping
• Defense +83% YoY (massive growth)
• Sold out on LEAP/GE9X through 2029
• Korean Air mega order: 103 aircraft
❌ Bear Case
• +90% YTD = near all-time highs (priced for perfection)
• Equipment orders -42% Q3 (volatile/lumpy)
• Corporate costs spiked +$300M
• Shop visits still below 2019 (is demand real?)
• Tax rate dropped to 15% (not sustainable)
• Any miss = instant 15-20% drop
• Recession risk not priced in
• Equipment orders -42% Q3 (volatile/lumpy)
• Corporate costs spiked +$300M
• Shop visits still below 2019 (is demand real?)
• Tax rate dropped to 15% (not sustainable)
• Any miss = instant 15-20% drop
• Recession risk not priced in
⚠️ Bottom Line
Q3 was a blowout (+44% EPS). Bulls: Services printing money, LEAP ramping, sold out for years. Bears: Stock up 90% YTD, equipment orders volatile, near ATH. Quality name, expensive price. Wait for dip or ride the momentum?
🚀 Bull Thesis
💎
Services = Cash Printer
Q3: Services +28%, shop visits +33%, spare parts +25%
Backlog: $175B total = years of locked-in revenue
Growth: LEAP shop visit output +30% in Q3
Pent-Up: 2025 shop visits STILL below 2019 = runway ahead
External: 3rd party LEAP visits up 2x, targeting 30% by 2030
Model: Recurring high-margin revenue (services = 70% of commercial $$$)
Backlog: $175B total = years of locked-in revenue
Growth: LEAP shop visit output +30% in Q3
Pent-Up: 2025 shop visits STILL below 2019 = runway ahead
External: 3rd party LEAP visits up 2x, targeting 30% by 2030
Model: Recurring high-margin revenue (services = 70% of commercial $$$)
⚡
LEAP = Printing Engines
Record Q3: LEAP +40% YoY, commercial engines +33%
Full Year: LEAP now +20% (raised from 15-20%)
CEO Quote: "Sold out on LEAP & GE9X through rest of decade"
Fleet: LEAP fleet expected to 3x by 2030 = annuity stream
Wins: Korean Air 103 aircraft (biggest ever), Cathay +14 more
Durability: Next-gen LEAP-1A HPT blade in production now
Full Year: LEAP now +20% (raised from 15-20%)
CEO Quote: "Sold out on LEAP & GE9X through rest of decade"
Fleet: LEAP fleet expected to 3x by 2030 = annuity stream
Wins: Korean Air 103 aircraft (biggest ever), Cathay +14 more
Durability: Next-gen LEAP-1A HPT blade in production now
👑
Flight Deck = Ops Excellence
Supplier Win: 1 key supplier hit 2x output using Flight Deck
Priority Suppliers: 95%+ of targets hit (3rd straight Q)
Material: Inputs +35% YoY, +high single digits sequentially
Turnaround: Malaysia shop cut LEAP disassembly 30%
Expansion: Poland facility now doing LEAP shop visits
Investment: ~$1B in supply chain, $3B annual R&D
Priority Suppliers: 95%+ of targets hit (3rd straight Q)
Material: Inputs +35% YoY, +high single digits sequentially
Turnaround: Malaysia shop cut LEAP disassembly 30%
Expansion: Poland facility now doing LEAP shop visits
Investment: ~$1B in supply chain, $3B annual R&D
🚀
Defense + Innovation
Defense Surge: Units +83% YoY (2nd straight Q of 80%+ growth)
R&D: $3B annual spend, 2.3B flight hours experience
GE9X: 2nd dust test running, most tested engine ever (30k+ cycles)
RISE: Earliest-ever testing on next-gen HPT blades
Tech: Applying GE9X durability lessons to LEAP fleet
Mission: ~1M people flying with GE engines RIGHT NOW
R&D: $3B annual spend, 2.3B flight hours experience
GE9X: 2nd dust test running, most tested engine ever (30k+ cycles)
RISE: Earliest-ever testing on next-gen HPT blades
Tech: Applying GE9X durability lessons to LEAP fleet
Mission: ~1M people flying with GE engines RIGHT NOW
🐻 Bear Thesis
📉
Valuation = Too Hot
Price: Near ATH after +90% YTD = minimal upside left
Disconnect: Services growth outpacing air travel = sustainable?
Pent-Up Risk: "Below 2019" - or is that the new normal?
Work Scopes: Costlier maintenance = airline pushback coming?
Execution: Stock priced for perfection, any miss = -15-20%
Momentum: Retail chasing, vulnerable to reversal
Disconnect: Services growth outpacing air travel = sustainable?
Pent-Up Risk: "Below 2019" - or is that the new normal?
Work Scopes: Costlier maintenance = airline pushback coming?
Execution: Stock priced for perfection, any miss = -15-20%
Momentum: Retail chasing, vulnerable to reversal
🏭
Order Volatility
Equipment: Orders -42% Q3 (blamed on "timing")
Lumpy: Equipment super volatile Q-to-Q = visibility issue
Total Orders: Only +2% despite "robust demand" talk
3rd Party: External LEAP visits up 2x = losing margin to MROs
Q4 Dependent: Need big Q4 to hit raised guidance
Costs: Corporate +$300M surprise (EHS reserves)
Lumpy: Equipment super volatile Q-to-Q = visibility issue
Total Orders: Only +2% despite "robust demand" talk
3rd Party: External LEAP visits up 2x = losing margin to MROs
Q4 Dependent: Need big Q4 to hit raised guidance
Costs: Corporate +$300M surprise (EHS reserves)
💸
Cyclical Peak Risk
Cycle: Aerospace near peak - any slowdown = major hit
ASK Slowdown: Air travel growth decelerating but GE accelerating = disconnect
Airline Squeeze: Higher work scopes = order deferrals coming?
History: 2008-09 saw engine orders -50% in recession
Consumer: High prices + debt = travel vulnerable
Beta: High-beta name gets crushed in correction
ASK Slowdown: Air travel growth decelerating but GE accelerating = disconnect
Airline Squeeze: Higher work scopes = order deferrals coming?
History: 2008-09 saw engine orders -50% in recession
Consumer: High prices + debt = travel vulnerable
Beta: High-beta name gets crushed in correction
⚠️
Execution Risks
Tax: Q3 rate 15% vs 20% (timing) - not repeatable
EPS Quality: +44% EPS but only +26% profit = financial engineering
Inventory: +$300M in Q3 - building or demand softening?
Shop Visits: "Still below 2019" - what if that's permanent?
3rd Party: Targeting 30% by 2030 = giving away margin
Q4 Critical: Must deliver to justify raised guidance
EPS Quality: +44% EPS but only +26% profit = financial engineering
Inventory: +$300M in Q3 - building or demand softening?
Shop Visits: "Still below 2019" - what if that's permanent?
3rd Party: Targeting 30% by 2030 = giving away margin
Q4 Critical: Must deliver to justify raised guidance
This analysis is for informational purposes only and should not be considered investment advice. Please consult with a financial advisor before making investment decisions.
