Equities

GE Aerospace Stock Surges 5.4% Post-Vernova Spinoff, Analysts Set High Targets

POSITIVE

GE Aerospace stock surges 5.4% post-Vernova spinoff, with analysts projecting up to 30% gains and a bright standalone future.

By Bill Bullington

4/3, 12:58 EDT
Boeing Company
General Electric Company
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Key Takeaway

  • GE Aerospace stock surged 5.4% to $143.87 post-Vernova spinoff, outperforming the S&P 500, signaling strong market confidence.
  • Analysts set high targets for GE Aero, with Jefferies aiming at $155 and Barclays and Deutsche Bank projecting up to $190 a share.
  • The broader GE ecosystem's market cap soared to roughly $240 billion post-spinoffs, highlighting significant strategic value unlocked.

GE Aerospace Soars

In the wake of the recent Vernova spinoff, GE Aerospace, retaining the iconic "GE" stock symbol, has seen a notable uptick in its stock performance, climbing 5.4% to $143.87 in early trading. This positive momentum is a testament to the market's confidence in GE Aerospace as a standalone entity, now fully focused on its core aerospace operations. The S&P 500's performance, in comparison, underscores GE Aerospace's standout success in the early market hours.

Analysts Bullish on GE Aero

The completion of the Vernova spinoff has prompted analysts to revisit their forecasts and valuations for GE Aerospace, with the consensus pointing towards a bright future. Jefferies analyst Sheila Kahyaoglu has set an ambitious price target of $155 a share, pegging the stock at a premium valuation of 40 times her 2024 per-share earnings estimate of $3.85. This valuation not only reflects confidence in GE Aerospace's financial health but also anticipates an impressive 17% average annual earnings growth over the next few years, a rate that doubles the S&P 500's recent growth performance.

Targets Suggest Upside

The optimism doesn't stop with Jefferies. Barclays and Deutsche Bank have set their sights even higher, with target prices of $175 and $190 a share, respectively, suggesting potential gains ranging from 20% to more than 30% from current levels. While CRFA analyst Stewart Glickman offers a more conservative view with a $147 target price, the overall market sentiment remains decidedly positive. The average target price, based on recent updates, stands at about $167 a share, indicating that more bullish revisions could be on the horizon.

GE Vernova and HealthCare Shine

The broader GE ecosystem, including GE Vernova and GE HealthCare, has also been basking in the glow of the successful spinoff, with their combined market capitalizations swelling to roughly $240 billion from $130 billion just before GE HealthCare's spinoff in early 2023. This remarkable growth underscores the strategic value unlocked through the restructuring, setting each entity on a path to capitalize on its specific market opportunities.