Watch GE Aerospace (GE) LEAP Engine Deliveries and Free Cash Flow (FCF) Conversion

$GE Aerospace(GE)$ is scheduled to report its fiscal fourth-quarter 2025 earnings on Thursday, January 22, 2026, before the market opens.

Since the 2024 spin-offs of GE Vernova and GE HealthCare, the company is now a "pure-play" aviation powerhouse. This Q4 report is particularly significant as it will finalize their first full fiscal year as a standalone aerospace entity and set the tone for 2026.

Earnings Estimates & Consensus

Consensus EPS: ~$1.40 – $1.42 (vs. $1.32 in Q4 2024).

Revenue Estimate: ~$11.2 billion – $11.3 billion (representing ~13% YoY growth).

FY 2025 Guidance: Management previously tightened guidance to an EPS range of $6.00 – $6.20.

GE Aerospace's fiscal Q3 2025 earnings, reported on October 21, 2025, were widely characterized as "exceptional." The company delivered a significant "beat and raise," surpassing analyst expectations on both the top and bottom lines.

Q3 2025 Earnings Summary

The results showcased GE Aerospace’s strength as a standalone entity, driven by a surge in demand for commercial services and a recovery in engine output.

Adjusted EPS: $1.66 (surpassing the consensus estimate of $1.45), representing a 44% YoY increase.

Adjusted Revenue: $11.3 billion (up 26% YoY), driven by the Commercial Engines & Services (CES) segment.

Free Cash Flow (FCF): $2.4 billion, reflecting a robust 130% conversion rate from net income.

Segment Performance:

• Commercial Engines & Services (CES): Revenue grew 27% to $8.9 billion. Notably, internal shop visit revenue rose 33% and spare parts revenue grew over 25%.

• Defense & Propulsion Technologies (DPT): Revenue climbed 26% to $2.8 billion, with military engine deliveries surging 83% as supply chain constraints eased.

The "Lesson Learnt" from Guidance

GE Aerospace used the Q3 report to raise its full-year 2025 guidance across all key metrics. However, the market's reaction—a slight pre-market dip followed by a recovery—offered a critical lesson in investor expectations vs. operational reality.

1. Services are the "Profit Fortress"

The biggest takeaway was management's shift in expectations for the aftermarket. They raised the full-year Commercial Services revenue growth outlook from "high teens" to "low-to-mid 20s."

• The Lesson: In an environment where new aircraft deliveries (from Boeing and Airbus) are delayed, the existing global fleet must fly longer. This creates a "higher-for-longer" demand for GE’s high-margin services and spare parts, making the company less dependent on new engine sales for near-term profit.

2. Supply Chain "Lean" is Working

CEO Larry Culp highlighted "Flight Deck," GE’s proprietary lean operating model. He noted that a critical supplier doubled its output after GE embedded its own experts to fix bottlenecks.

• The Lesson: For GE, the supply chain is no longer an "external factor" but an operational variable they can control. Investors learned that GE’s "Lean" culture is a tangible competitive advantage that allows them to raise output (LEAP deliveries were up 40% in Q3) while competitors remain stuck.

3. High Valuation Demands Perfection

Despite raising the EPS guide to $6.00 – $6.20 (from $5.60 – $5.80), the stock initially struggled to break out.

• The Lesson: When a stock trades at a premium P/E (often 40x+), a "standard beat" is already priced in. To move the needle, the company must provide an "extraordinary raise." For the upcoming Q4 report, investors will expect nothing less than a repeat of this operational excellence.

Key Metrics to Watch

Investors will likely look past the top-line revenue to focus on the "quality" of the growth in two specific segments:

• Commercial Services & Aftermarket: This is GE’s profit engine. Look for internal shop visit growth and spare parts revenue. In Q3, services grew 28%; if this maintains or accelerates due to older fleets flying longer, it’s a major bullish signal.

• LEAP Engine Deliveries: Monitor the output of CFM LEAP engines (used in Boeing 737 MAX and Airbus A320neo). GE has been aggressively tackling supply chain constraints; look for whether they hit their ~2,000 engine shipment goal for the year.

• Free Cash Flow (FCF) & Capital Returns: GE has committed to returning ~70% of FCF to shareholders. Pay attention to updates on the $15 billion share buyback program and any dividend hike signals for 2026.

• Defense & Propulsion (DPT) Margins: While Defense has seen strong orders, margins have been under pressure from inflation and mix. Look for "Flight Deck" (their lean operating model) improvements here.

GE Aerospace (GE) Price Target

Based on 17 analysts from Tiger Brokers offering 12 month price targets for GE Aerospace in the last 3 months. The average price target is $351.54 with a high forecast of $394.00 and a low forecast of $281.23. The average price target represents a 12.55% change from the last price of $312.34.

Short-Term Trading Analysis

Trading GE around earnings can be volatile, though it has historically trended upward following recent beats.

Historical Context: In Q1 and Q3 of 2025, GE delivered significant EPS surprises (over 13%), which led to immediate gaps up. However, in Q2 2025, the stock saw a minor dip despite a beat, suggesting that expectations are now very high.

Implied Move: Options markets are currently pricing in a ~5.5% move in either direction for the earnings event.

If we looked at the expected move for GE after its last earnings in October 2025, we saw a dip of 2,85%, this is the second consecutive dip after the first one occurred in July 2025 earnings, so we might want to take note of the volatility that could surround GE stock price after its earnings release.

Technical Analysis - Exponential Moving Average (EMA)

If we looked at how GE have been trading last week, the bulls are struggling to make an upside continuation despite managing to stay traded above the 26-EMA, but we saw GE dropped down below the 26-EMA level and now defending the 50-day level.

Though GE RSI momentum remains positive, but we could see further decline before its earnings release tomorrow (22 Jan) if the market continue to be marred by the tariffs narrative on the european nations, as well as if there is a lack of evidence that GE’s "Flight Deck" lean model is successfully easing supply chain bottlenecks to meet delivery targets for narrowbody engines.

I would be monitoring the price action closely on this stock as this is part of the defensive strategy that we might want to work on.

Summary

GE Aerospace (GE) is set to report its fiscal Q4 2025 earnings on Thursday, January 22, 2026, at 7:30 AM ET. This report marks the conclusion of GE's first full year as a standalone aerospace leader.

Earnings Estimates & Sentiment

• Consensus EPS: ~$1.40 – $1.42 (vs. $1.32 in Q4 2024).

• Revenue Estimate: ~$11.2 billion – $11.3 billion.

• Annual Guidance: The market is watching for GE to hit or exceed its tightened FY 2025 EPS range of $6.00 – $6.20.

Sentiment remains moderately bullish, as GE has beaten EPS estimates in each of the last four quarters. However, with the stock up over 90% in the past year, "whisper" expectations are high, leaving little room for error regarding 2026 outlook.

Key Metrics to Watch

1. Aftermarket Services Revenue: With aircraft OEMs (Boeing/Airbus) facing delivery delays, the aging global fleet requires more maintenance. Watch for internal shop visit growth, which surged 33% in Q3 and is GE's highest-margin revenue stream.

2. LEAP Engine Deliveries: Investors want evidence that GE’s "Flight Deck" lean model is successfully easing supply chain bottlenecks to meet delivery targets for narrowbody engines.

3. Free Cash Flow (FCF) Conversion: GE previously targeted >100% FCF conversion. Look for updates on the $15 billion share buyback and potential for a 2026 dividend hike.

Short-Term Trading Strategy

• The "Momentum" Play: If GE beats and provides 2026 EPS guidance above $7.00, look for a breakout toward the 12-month high of $332.79.

• The "Margin" Risk: Any commentary on rising labor or material costs could trigger a pull-back to the 50-day moving average (~$304).

• Volatility: Options are pricing in a ~5.5% move. Given the high valuation (P/E ~42x), an "in-line" report might be treated as a "sell-the-news" event.

Appreciate if you could share your thoughts in the comment section whether you think GE could overcome headwinds of the deliveries and gather investors sentiment into much higher buying pressure.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire @MillionaireTiger appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.