GE Aerospace is set to become a separate company on April 2, and investors are excited. GE stock as a whole has been surging over the past year thanks to soaring confidence over the company’s restructuring. GE Healthcare has already separated from the parent entity, and investors have been looking at the remaining companies as GE Aerospace (aircraft, engines, and related components) and GE Vernova (energy sector holdings) rather than as a single entity.

GE Vernova’s market cap is estimated at about $27.3 billion. However, GE as a whole (minus the separate GE Healthcare) is valued at $183 billion. That means that GE Aerospace is valued at around $155.7 billion. Clearly, investors are expecting massive performance.

Why Is GE Breaking Up?

GE is in the process of becoming a completely different company than it was even five years ago. This is occurring through divestitures and spin-offs in an effort to focus on core businesses, reduce debt, unlock shareholder value, and adapt to market changes. GE can better allocate resources, respond to industry trends, and enhance operational efficiency by reshaping its business structure. Ultimately, GE aims to concentrate on its strengths while positioning itself for long-term growth and competitiveness.

GE Aero: The Real Thing?

So, what of the massive valuation currently assigned to GE Aerospace? Many analysts are still quite bullish. The company’s main competitors have been hit with a string of problems in recent years that will take some time to sort out. Boeing’s troubles are the most notable, but RTX recently had a manufacturing issue, and both RTX and Lockheed Martin are still recovering from supply chain difficulties.

In the long run, GE will remain a trusted “go-to” brand in the aerospace and defense sector. Only time will tell whether the company can maintain its edge over its competitors, but it's likely to stay in the mix unless it suddenly hits major issues of its own. GE Aerospace may be getting close to fully valued, but analysts believe there is still some room to grow.

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