GE Aerospace stock price target raised to $300 by TD Cowen on strong outlook

TD Cowen has raised its price target on GE Aerospace (NYSE:GE) to $300 from $275, maintaining a Buy rating, following the company's increased 2028 EBIT target to $11.5 billion and 2025 EBIT midpoint to $8.35 billion, primarily driven by strong aerospace aftermarket performance. The stock has seen a 71% return over the past year and trades at a 41x P/E, indicating high growth expectations. Analysts see potential upside to the 2025 guidance, particularly in services, with the 2028 outlook anticipating double-digit services sales compound annual growth, reinforcing a bullish long-term view on aftermarket trends.

Analysis

GE Aerospace (GE) is experiencing strong positive sentiment from analysts, evidenced by TD Cowen raising its price target to $300 from $275 while maintaining a Buy rating. This optimism is fundamentally driven by GE's own upward revision of its financial outlook, with its 2028 EBIT target increased to $11.5 billion from $10 billion and its 2025 EBIT midpoint lifted to $8.35 billion. The primary driver for this enhanced forecast is persistent strength in the high-margin aerospace aftermarket segment. The stock's 71% return over the past year and its current P/E ratio of 41x indicate that significant growth is already priced in by the market. However, TD Cowen suggests there may be further upside, viewing the 2025 guidance as potentially conservative given an implied 14% second-half EBIT decline that is not fully explained by product mix shifts. The long-term outlook to 2028 is supported by a projected double-digit services sales CAGR, with LEAP engine aftermarket profitability expected to approach the high services average margin of over 40%. A key risk factor has emerged with the National Transportation Safety Board's safety alert regarding potential smoke hazards in CFM LEAP-1B engines, which could create headwinds for a critical product line shared with Boeing.

Key Decisions for Investors

• Given the raised corporate guidance and strong analyst support, investors may see the elevated 41x P/E ratio as justified by the long-term earnings potential in the high-margin services division.
• Consider that current 2025 guidance may be conservative, as analysts note the implied second-half slowdown seems overly steep, suggesting a potential for future positive earnings revisions or beats.
• It is crucial to monitor developments related to the NTSB safety alert for the CFM LEAP-1B engine, as any significant fallout could pose a direct risk to a key growth driver and impact both GE and its partner Boeing.
• Investors should weigh the strong aftermarket demand and pricing power, which have persisted despite tariffs and softer regional airline trends, against the newly introduced operational risks from the engine safety alert.