GE Aerospace (GE): LEAP Aftermarket Maturity Unlocks Profit Flywheel, Can Execution Levers Sustain the Services-Led Reacceleration?

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GE Aerospace’s Q2 2025 results reinforced the strength of its services-driven model, with revenue up 23% YoY to $10.1B and operating profit rising 23% to $2.3B, as CES margins expanded 50bps to 27.9%. Growth was underpinned by +20% shop visits, >25% spare parts sales, and >20% LEAP aftermarket volume, highlighting the monetization power of a scaling installed base. Management raised FY25 guidance, now expecting mid-teens revenue growth, $8.2–$8.5B operating profit, EPS of $5.60–$5.80, and FCF of $6.5–$6.9B, citing improved material flow, supplier adherence >95%, and a 37% YoY lift in engine deliveries. With 70% of revenue recurring and CES profit forecast to grow >50% by 2028, the earnings runway looks durable, supported by LEAP’s 3x fleet growth, GE90’s high-value second-visit cycle, and CFM56 shop visits peaking in 2027. Defense momentum also adds ballast with a $5B F110 contract and $750M NGAP funding. Strategic investments in $2B+ infrastructure, 200 new LEAP repairs YTD, and long-cycle programs like GE9X and CFM RISE reinforce future earnings power. With services mix driving high-margin stability and targets raised to $11.5B operating profit by 2028, can GE Aerospace sustain this services-led reacceleration and consistently execute on aftermarket scaling to extend its profit flywheel?

Table of Contents :
• Stock Rating & Target Price
• Investment Thesis
• Fundamental Models Used
• Company Description
• Corporate Timeline
• Key Metrics (KPI ) and Recently Reported Earnings Review
• Business Highlights, Strategic Announcements & Outlook
• Quarter-over-Quarter (Q-o-Q) and Year-over-Year (Y-o-Y) Growth Analysis
• Key Catalysts Driving Growth
• Historical Financial Statement Analysis & CAGR Trends
• Quarterly Key Financial Ratios and Performance Metrics
• Annual Financial Performance Analysis: Horizontal and Vertical Financial Analysis, Trends
• Financial Forecasts
• Annual Forecasts: Income Statement
• Annual Forecasts: Cash Flow Statements
• Net Debt Levels
• A Closer Look at DCF: Our Assumptions and Methodology
• Terminal Value Calculation
• Target Price Analysis
• Valuation Multiples
• Supplementary Valuation Analysis: Multiples Approach
• Scenario/Sensitivity Analysis – Base Case , Bull Case ,Bear Case
• Holistic Peer Review & Trading Comps: Financial Data, Operational Metrics, and Valuation Multiples
• Implied Price Per Share
• Ownership Activity/ Insider Trades
• Ownership Summary
• An analysis of ESG Risk Rating
• Key Professionals
• Key Board Members
• Key Risks Considerations
• Analyst Ratings
• Analyst Industry Views
• Disclosures

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