NEW YORK, July 17, 2026, 10:35 EDT
- Shares gained 3.1% to $356.52 as of 10:20 EDT, rebounding after a 4.1% decline on Thursday.
- Over 95% of spare-parts revenue for the third quarter is backlogged, while shop visits are oversubscribed by 40%.
- An early intraday estimate puts the stock at 46 times projected 2026 earnings, with an implied free-cash-flow yield near 2.45%.
Shares of GE Aerospace NYSE:GE climbed 3.1% on Friday morning, despite a lower open for Wall Street’s leading indexes. The stock recouped close to 75% of the loss it suffered after Thursday’s earnings report. U.S. cash markets remained open.
The development is significant as growth in orders has become a less reliable short-term indicator of demand. GE started the third quarter with over 95% of spare-parts revenue already booked in backlog.
Output remains the main constraint. GE’s schedule for shop visits is currently oversubscribed by 40%. Spare-parts backlogs rose another 20% from the previous quarter.
The data backs Jim Cramer’s outlook over the long term. On CNBC, Cramer described the market pullback as a “great buying opportunity.” He said he was unconcerned about fluctuations from quarter to quarter.
Total orders increased by 17% in the second quarter, a significant slowdown from the 87% growth seen three months prior. Orders for commercial services still advanced 22%.
The quarter overall posted robust results. Adjusted earnings were $2.02 per share, surpassing analyst expectations of $1.86. Adjusted revenue increased by 24% to $12.63 billion. Free cash flow jumped 43% to $3.03 billion.
Management increased its 2026 adjusted earnings forecast to $7.65-$7.85 per share and boosted its free-cash-flow outlook to $8.9-$9.2 billion. The updated cash-flow midpoint is 10.4% higher than the previous midpoint.
The valuation is still elevated. Based on preliminary estimates using Friday’s intraday price, GE trades at 46 times its projected earnings. Its $369.9 billion market capitalization suggests a 2.45% yield on projected free cash flow. This provides little cushion for any shortfall in performance.
| Investor measure | Latest reading | Comparison | Investor read |
|---|---|---|---|
| Share-price move | +3.1% Friday | -4.1% Thursday | Roughly 73% of the prior loss regained |
| Total order growth | +17% in Q2 | +87% in Q1 | Headline order growth slowed significantly |
| Commercial-services orders | +22% in Q2 | +34% in first half | Aftermarket demand continues to be strong |
| Q3 spare-parts coverage | More than 95% backlogged | Similar level in Q2 | Short-term visibility remains high |
| Free-cash-flow midpoint | $9.05 billion | $8.20 billion previously | Guidance lifted by 10.4% |
| Adjusted operating margin | 21.7% | 23.0% a year earlier | Down by 130 basis points |
Commercial Engines & Services accounted for 77% of adjusted revenue in the last quarter. Changes in capacity can therefore have a swift impact on group earnings. This is also true for any additional supply delays.
Chief Executive Larry Culp told analysts, “We do not have a demand problem.” He said the outlook past 2026 is largely limited by supply. GE’s commercial-services backlog is close to $170 billion. GE Aerospace
Margins already show the impact. Adjusted operating margin declined by 130 basis points to 21.7%. The commercial division’s margin slipped 160 basis points to 27.3%. Growth in installed engines, ongoing investments, and inflation pressured profits.
Vertical Research analyst Robert Stallard noted the second-half outlook could reflect “some conservatism.” Additional gains remain reliant on suppliers maintaining recent increases in output. MarketWatch
Risks continue to be significant. A resurgence of conflict may drive fuel prices up enough to reduce travel demand. Delays from suppliers may hold back backlog conversion. The LEAP durability retrofit across the fleet could last into the early 2030s.
The recovery seen on Friday bolsters the outlook for demand, but it does not address execution challenges. Additional upside depends on accelerating parts flow, boosting shop throughput, and maintaining stable margins.
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