Al Root
Some aerospace earnings spooked investors this week. But underlying demand trends remain intact, creating an opportunity for steely-nerved investors.
Through Wednesday trading, shares of GE Aerospace were down 9%, dropping even after the company reported better-than-expected earnings. The headline numbers were fine, but cautious comments about air travel growth, due to high oil prices, sent investors fleeing the stock.
To be sure, high oil prices are a problem, but demand for jets is strong, especially after years of production below plan. Both Boeing and Airbus have struggled to produce planes in recent years. There are probably 3,000 or 4,000 missing planes that airlines would have taken but that were never got built.
"Buy the dip" in GE Aerospace stock, wrote Citi analyst John Godyn in a post-earnings report. "We were surprised by the reaction to the [earnings] print given how unusually strong the first-half 2026 is trending and GE's history of compounding through aftermarket air pockets."
His peers agree: About 85% of analysts covering GE stock rate shares Buy. The average Buy-rating ratio for stocks in the S&P 500 typically ranges from 55% to 60%. The average analyst price target is $351, up 25% from recent levels.
What's more, the concern about a spike in aircraft retirements hitting demand is "overblown," Godyn says. "GE and RTX highlighted aftermarket strength, as well as no signs of retirements picking up in recent EPS reports."
As for RTX, Godyn expects the company to raise guidance in coming earnings reports. He rates both shares Buy. Overall, 59% of analysts covering RTX shares rate them Buy. The average analyst price target is $219, up about 20% from recent levels.
Investors got some good sector news on Thursday when Hexcel reported first-quarter numbers. The company reported earnings per share of 59 cents. Wall Street was looking for 43 cents.
Shares were up 11.4% in midday trading, while the S&P 500 was flat.
The company reiterated its 2026 guidance, which includes revenues of $2.0 billion to $2.1 billion and earnings per share of about $2.20. Wall Street projects $2.23 a share.
"Management noted their confidence in these targets despite the War in the Middle East, and lingering commercial aerospace supply chain challenges," wrote Vertical Research Partners analyst Rob Stallard on Thursday.
That was enough to calm investors' nerves. How fast GE and RTX shares can recover is hard to say, but Wall Street still likes them.
GE stock was up 1.8% in midday trading on Thursday. RTX shares were down 0.2%.
Write to Al Root at allen.root@dowjones.com
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(END) Dow Jones Newswires
April 23, 2026 13:16 ET (17:16 GMT)
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