GE jumps to four-year high on outlook for jet engine demand

General Electric jumped as much as 9.2% last week to a four-year high of $94.94 a share after management forecast that demand for jet engines and maintenance services would drive revenue gains for the next couple of years.

A rebound in air travel after the lifting of pandemic lockdowns has airlines to order more planes from manufacturers such as Boeing and Airbus, which are two of GE Aerospace’s biggest customers.

The company forecast revenue growth in the low double digits to mid-teens through 2025, with a profit margin of about 20%. It also maintained its estimate of adjusted EPS of $1.60 to $2.00 for 2023 and revenue growth in the high single digits.

“The future is bright at GE (GE),” Lawrence Culp, chairman and CEO of the company, said in prepared remarks for its investor day. “We are operating from a stronger foundation and as a fundamentally simpler business that is creating significant value today and going forward.”

GE Aerospace and its joint venture partners have an installed base of about 41,000 commercial jet engines and more than 26,000 fighter jet engines that support demand for what are known as aftermarket services.

As airlines seek to prolong the use of their existing fleets amid the shortage of new planes, GE Aerospace is poised to expand its services business. Services made up 70% of GE Aerospace’s revenue in 2022.