How Much Downside Is Left In GE Aerospace Stock

Shares of GE Aerospace (GE) have lost 14.8% over the past three months, while the S&P 500 gained 2.8%. Part of that drop materialized over the past month as RTX and Boeing shares fell as well, showing that the weakness was not isolated to GE. The broader market, however, did not drop with the aerospace sector. So how far has GE stock fallen when the market itself sold off?

GE Stock Fell A Fifth In The Average Selloff

During broader market downturns, GE stock has fallen an average of 22.1%, compared to a 15.8% decline for the S&P 500. That historical baseline covers 15 market shocks since 2007. A market-wide selloff today would compound the losses that GE shareholders have already absorbed.

The steepest of these declines occurred during the 2008-2009 Global Financial Crisis, when GE plunged 81% against a 53% drop for the S&P 500. A similar dynamic played out when the pandemic hit markets, pushing GE stock down 51% while the index lost 34%.

Rebounds typically happen quickly, with GE stock returning to its pre-shock high 2.3 months after the low. Three recoveries required more than a year, however. It took GE stock 79.5 months to recover from the 2008-2009 low, and 14 months to bounce back from the growth scare of late 2018.

GE Aerospace Is Growing Fast With Little Debt

Underneath the stock performance, the underlying business is expanding steadily. GE Aerospace grew its revenue 21.1% in the latest quarter from a year earlier, following a 24.7% increase in the prior quarter. Commercial Engines & Services drives the bulk of this activity, generating 73% of revenue in fiscal 2025.

The operating margin slipped slightly amid this revenue expansion, dipping to 18.7% over the last twelve months from 19.1% a year earlier. At the same time, GE maintains a clean balance sheet. Its debt equals 6.0% of its market value, coming in well below 21% for the S&P 500.

GE Expects A Smaller Rise In Engine Maintenance Sales

Management expects GE's services business, which handles the regular maintenance of engines it has already sold, to grow more slowly. During a July 16 call, executives guided for second-half service revenue to rise at a low double-digit rate, following a very strong second half last year. That forecast marks a deceleration from the first half, when service revenue grew 32%.

The company is also shipping spare parts late. Shipments delayed for lack of materials grew 20% in the second quarter from the first, and management called supply a bigger challenge than demand. In September, GE agreed to buy castings supplier Consolidated Precision Products for $11.75 billion.

Costs are rising at the same time. Management noted on the same call that margins fell 130 basis points in the second quarter, and it blamed installed engine growth, investments, and inflation. The first GE9X engines cost the most to build, and management expects its losses on that engine to peak by 2028.

If third-quarter service growth comes in below the low double-digit rate that management guided for the second half, it will signal that GE's maintenance business is slowing faster than planned.

Does This Mean You Should Act On GE?

Our purpose is to inform you with unique data so you make the right investment decisions. That said, betting on a single stock is always risky, no matter which direction you choose.

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