GE Aerospace: Bar Was High, but Fundamentals Strong and Upside Remains; Reit OW

研报英文原文证据摘录

GE Aerospace: Bar Was High, but Fundamentals Strong and Upside Remains; Reit OW

th guidance is up to low-20’s vs mid-

teens prior, which we view as quite attainable, given that our 22% estimate Style Exposure

implies only modest sequential growth in each of the two remaining quarters

of the year. Mgmt made the point repeatedly that greater material availability

would allow stronger growth, and Services orders have exceeded sales by at

least 20% in each of the past six quarters, suggesting that any improvements

in productivity can drive sales and earnings. Looking to next year, GE’s 2028

framework is based on low-double-digit annual Services growth in 2027-28,

though this is now off a higher 2026 base. To start next year in the low-double-

digit range, Services sales would need to be ~$7.6b in Q1, or 2% above the

2Q26 result and still well below average orders of $9.0b over the past four

quarters.

• Services orders didn’t meet high expectations but remain elevated, with

Services backlog growing. CES Services orders were up 22% in Q2 vs up

~50% in Q1 and this follows mid-20’s growth in 2025. This was below elevated

buyside expectations but on a dollar basis Q2 orders of ~$9.6bn were near the

record result of ~$9.8bn last quarter, commendable in our view. In late May, GE

noted that spare parts orders were up 40% quarter-to-date but overall Services

metrics include not just spares but shop visits as well, with the later comprising

the majority, so the comparison is not apples-to-apples. Also, over the past 10

quarters we estimate that Services orders have exceeded sales by ~$17b

cumulatively, and while Services orders in 2Q26 did not grow as fast as sales,

they still exceeded sales by 30%. Over the next several quarters, then, it is likely