Can an exciting innovation boost the value of GE Aerospace (GE)? In collaboration with NASA, GE is developing a hybrid electric engine for narrow-body jets that aims to reduce fuel consumption by up to 5%. Initial component tests are completed, and full system tests are planned. This is just one of several energy-saving initiatives the company is engaged in. GE is also working on an open-bladed engine with aircraft equipment manufacturer Safran, potentially cutting fuel use by as much as 20%. Global aviation is responsible for 2% of global emissions, and the industry goal is to produce net-zero emissions by 2050.
News Comes Amidst Major Operational Split
In April, General Electric split into three separate businesses—GE Aerospace, the energy-focused GE Vernova (GEV), and GE Healthcare (GEHC). This was done to breathe new life into the company following various difficulties through the years. Its aim is to attract investors and boost profitability. Has it worked? GE and GEV have advanced marginally in the past months, with Strong Buy and Buy ratings, while GEHC has declined. GE Aerospace continues to experience headwinds, such as ongoing supply chain issues and engine repair delays, both of which the company is trying to address.
Is This A Game Changer?
This exciting news about GE’s hybrid jet plans did little to put a fire under its share price. However, should these efforts prove successful, that may change. Even so, Wall Street analysts remain bullish on GE stock overall. The consensus is a Strong Buy, with Edward Jones, JP Morgan, Goldman Sachs, Barclays, and Oppenheimer, among others, weighing in.
It’s worth noting that JP Morgan recently lowered its second-quarter sales estimate to $8.4 billion, which is lower than the consensus of $8.85 billion. The analyst cites the continued supply chain challenges, saying that the company may miss its 2024 delivery target. However, this isn’t being seen as something that will stop either near-term or future growth.
The average price target is $183.47, with a high estimate of $211. Shares are currently trading around $163, suggesting there’s room for growth.
Julie Stoller does not have positions in this company. Stocks.News has positions in GE.
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Contributing Writer
As a professional writer since 2012, Julie Stoller has covered many industries, from healthcare and technology to consumer products and industrials. She has written about IPOs, spinoffs, ETFs, stock splits, commodities, legislative actions impacting investors, and macroeconomic issues. While keeping up with the latest meme stocks and trends, Julie's special interests are discovering ...