GE Aerospace GE

Near $335, about 41 times earnings, the price discounts a decades-long services annuity, not this year's engine sales. Roughly 70% of GE Aerospace's revenue is high-margin aftermarket — spare parts, overhauls and shop visits — earned across an installed base of about 78,000 engines. First-quarter orders jumped 87% to $23 billion and the commercial-services backlog reached about $170 billion, so the multiple is paying in advance for service those engines will need for thirty years.

GE Aerospace's GAAP operating margin fell to 13.7% in the first quarter of 2026, down from the low-twenties, even as revenue rose 25% to $12.4 billion. The cause is the engine ramp: deliveries of new LEAP and GE9X engines climbed sharply — total engine shipments were up about 50% — and new engines sell near breakeven, with the profit arriving later through service. Management attributed the roughly 200-basis-point drop in adjusted margin to installed-engine growth, investment and inflation, plus about $500 million of tariff costs it plans to pass on.

On the numbers it is a clear premium. GE Aerospace trades near 41 times trailing earnings and about 46 times forward, against roughly 25 to 26 times forward for RTX, about 27 times for Honeywell, and around 17 times enterprise value to EBITDA for Safran. That is a premium of roughly 70 to 80% to its closest engine and aerospace peers, and above GE's own average since the 2024 breakup. Supporters point to the quality of the aftermarket annuity and cash conversion that runs ahead of its peers; the multiple itself is the single largest risk if growth slows.

Aftermarket services — spare parts, overhauls and shop visits on engines already in service — make up roughly 70% of GE Aerospace's revenue and carry margins well above new-engine sales. The model is razor-and-blades: GE and its 50/50 CFM joint venture with Safran sell engines like the LEAP near breakeven, then earn high-margin service for the 30-plus years each engine flies. In the first quarter of 2026 services revenue rose 39%, shop-visit revenue 35% and spare-parts sales more than 25%, off an installed base of about 78,000 engines.