⚠ Thirty-Seven Times Earnings, and the Margin Is FallingModerate threat

GE Aerospace (GE) — threat to the moat

The forward multiple is higher than the trailing one, which is the market saying this year's earnings will be lower.

GE Aerospace trades at about 37.4 times trailing earnings on a share price of $317.56 and a market value near $329.5 billion, yielding 0.59%1. That is a price for a certainty, and the certainties here are real. It is still a price.

What the price assumes, against what is happening37.4xTrailing P/E37.7xForward P/E$8.49Trailing EPS $$7.65-7.852026 adjusted EPSguidance midpoint $The forward multiple being higher than the trailing one says consensus expects lower earnings this year.
A wide moat is not a price, and the June quarter’s margin fell 160 basis points.

The first thing it assumes is that the margin recovers. It is currently going the other way: the June 2026 quarter's profit margin fell seventy basis points and operating profit margin 130 basis points, with Commercial Engines & Services down 160 basis points from install engine growth, investments and inflation2. The explanation is benign — engines are sold at a loss and a delivery ramp dilutes the margin3 — and it is still a margin falling while the multiple sits near forty.

The second thing it assumes is that shop visits keep compounding. Internal shop visit revenue grew twenty-four per cent in 20254 and thirty per cent in the first half of 20265, which is a catch-up cycle running against global departure growth of about three per cent6. Catch-up cycles end.

The third, and least discussed, is that the reported earnings are the right earnings. The 2025 result of $8,704 million7 includes $1,487 million of other income, largely gains on retained equity interests8, and the forward consensus multiple of 37.79 is actually higher than the trailing one — which is the market saying that this year's adjusted earnings will be below the trailing twelve months. Management's own guidance is for adjusted earnings per share of $7.65 to $7.85 in 202610 against a trailing figure of $8.4911.

And there is the run-off insurance book, $36,894 million of liabilities against $18,677 million of equity12, which has its own page and its own risk.

The defence of the price is duration. A services backlog of $178,705 million releasing over fifteen years13 is a claim on the 2030s that very few companies can offer.

Use the measure the company guides on: adjusted earnings per share of $7.65 to $7.85 for 2026, against $6.37 in 202514. Delivered, the multiple compresses to about forty times a rising number. Missed, a wide moat is worth a great deal less at this price than at half of it.

The number that tests this threat
Reported
Adjusted earnings per share guidance
$7.65-$7.85 for 2026, against $6.37 in 2025

The forward consensus multiple of 37.7 is higher than the trailing 37.4, which is the market saying this year's adjusted earnings will be below the trailing twelve months of $8.49. Meanwhile the June 2026 commercial margin fell 160 basis points. Delivered, the multiple compresses against a rising number; missed, a wide moat is worth much less at this price.

Source: GE Aerospace (GE) market data ↗
References
  1. ReportedGE Aerospace trades at about 37.4 times trailing earnings on a share price of $317.56 and a market value near $329.5 billion, yielding 0.59%.
    GE Aerospace (GE) market data - share price, market capitalisation, trailing and forward price/earnings, trailing revenue, net income and earnings per share, dividend and yield, shares outstanding and the 52-week range. — September 2026 · publ. September 2026 · source ↗
  2. ReportedIt is currently going the other way: the June 2026 quarter's profit margin fell seventy basis points and operating profit margin 130 basis points, with Commercial Engines & Services down 160 basis points from install engine growth, investments and inflation.
    GE Aerospace second-quarter 2026 earnings release (Exhibit 99.1 to Form 8-K of July 16, 2026) — total company GAAP and non-GAAP results, segment revenue, orders and operating profit, free cash flow, the raised full-year 2026 guidance for adjusted revenue growth, operating profit, adjusted earnings per share and free cash flow, the LEAP-1B durability kit certification, the XA102 and GE426 defence programmes, the NASA hybrid-electric ground tests, and the chief executive's commentary. — Q2 2026 · publ. 16 July 2026 · source ↗
  3. ReportedThe explanation is benign — engines are sold at a loss and a delivery ramp dilutes the margin — and it is still a margin falling while the multiple sits near forty.
    GE Aerospace Form 10-K, FY2025 - consolidated financial statements — statement of operations including sales of equipment, sales of services, insurance revenue and their respective costs; statement of financial position including insurance liabilities and annuity benefits, shareholders' equity, property plant and equipment and shares outstanding; and the statement of cash flows. — FY2025 · publ. January 2026 · source ↗
  4. ReportedInternal shop visit revenue grew twenty-four per cent in 2025 and thirty per cent in the first half of 2026, which is a catch-up cycle running against global departure growth of about three per cent.
    GE Aerospace Form 10-K, FY2025 - Segment Operations — Commercial Engines & Services: segment revenue, profit and margin, commercial engine and LEAP unit deliveries, internal shop visit revenue growth, the CES remaining performance obligation, the 2025 engine commitments from Qatar Airways, Emirates, International Airlines Group, ANA Holdings, Malaysia Aviation Group, Korean Air, Cathay Pacific and Pegasus, and commercial departures growth. — FY2025 · publ. January 2026 · source ↗
  5. ReportedInternal shop visit revenue grew twenty-four per cent in 2025 and thirty per cent in the first half of 2026, which is a catch-up cycle running against global departure growth of about three per cent.
    GE Aerospace Form 10-Q for the quarter ended June 30, 2026, Management's Discussion and Analysis — consolidated revenue, profit and earnings per share, the segment results for Commercial Engines & Services and Defense & Propulsion Technologies, commercial engine and LEAP unit deliveries, internal shop visit revenue growth, the remaining performance obligation and its equipment and services split, the supply chain, tariff and Middle East discussions, and the planned $1 billion US manufacturing investment and 5,000 US hires. — Q2 2026 · publ. July 2026 · source ↗
  6. ReportedInternal shop visit revenue grew twenty-four per cent in 2025 and thirty per cent in the first half of 2026, which is a catch-up cycle running against global departure growth of about three per cent.
    GE Aerospace Form 10-K, FY2025 - Segment Operations — Commercial Engines & Services: segment revenue, profit and margin, commercial engine and LEAP unit deliveries, internal shop visit revenue growth, the CES remaining performance obligation, the 2025 engine commitments from Qatar Airways, Emirates, International Airlines Group, ANA Holdings, Malaysia Aviation Group, Korean Air, Cathay Pacific and Pegasus, and commercial departures growth. — FY2025 · publ. January 2026 · source ↗
  7. ReportedThe 2025 result of $8,704 million includes $1,487 million of other income, largely gains on retained equity interests, and the forward consensus multiple of 37.7 is actually higher than the trailing one — which is the market saying that this year's adjusted earnings will be below the trailing twelve months.
    GE Aerospace Form 10-K, FY2025 - consolidated financial statements — statement of operations including sales of equipment, sales of services, insurance revenue and their respective costs; statement of financial position including insurance liabilities and annuity benefits, shareholders' equity, property plant and equipment and shares outstanding; and the statement of cash flows. — FY2025 · publ. January 2026 · source ↗
  8. ReportedThe 2025 result of $8,704 million includes $1,487 million of other income, largely gains on retained equity interests, and the forward consensus multiple of 37.7 is actually higher than the trailing one — which is the market saying that this year's adjusted earnings will be below the trailing twelve months.
    GE Aerospace Form 10-K, FY2025 - consolidated financial statements — statement of operations including sales of equipment, sales of services, insurance revenue and their respective costs; statement of financial position including insurance liabilities and annuity benefits, shareholders' equity, property plant and equipment and shares outstanding; and the statement of cash flows. — FY2025 · publ. January 2026 · source ↗
  9. ReportedThe 2025 result of $8,704 million includes $1,487 million of other income, largely gains on retained equity interests, and the forward consensus multiple of 37.7 is actually higher than the trailing one — which is the market saying that this year's adjusted earnings will be below the trailing twelve months.
    GE Aerospace (GE) market data - share price, market capitalisation, trailing and forward price/earnings, trailing revenue, net income and earnings per share, dividend and yield, shares outstanding and the 52-week range. — September 2026 · publ. September 2026 · source ↗
  10. ReportedManagement's own guidance is for adjusted earnings per share of $7.65 to $7.85 in 2026 against a trailing figure of $8.49.
    GE Aerospace second-quarter 2026 earnings release (Exhibit 99.1 to Form 8-K of July 16, 2026) — total company GAAP and non-GAAP results, segment revenue, orders and operating profit, free cash flow, the raised full-year 2026 guidance for adjusted revenue growth, operating profit, adjusted earnings per share and free cash flow, the LEAP-1B durability kit certification, the XA102 and GE426 defence programmes, the NASA hybrid-electric ground tests, and the chief executive's commentary. — Q2 2026 · publ. 16 July 2026 · source ↗
  11. ReportedManagement's own guidance is for adjusted earnings per share of $7.65 to $7.85 in 2026 against a trailing figure of $8.49.
    GE Aerospace (GE) market data - share price, market capitalisation, trailing and forward price/earnings, trailing revenue, net income and earnings per share, dividend and yield, shares outstanding and the 52-week range. — September 2026 · publ. September 2026 · source ↗
  12. ReportedAnd there is the run-off insurance book, $36,894 million of liabilities against $18,677 million of equity, which has its own page and its own risk.
    GE Aerospace Form 10-K, FY2025 - consolidated financial statements — statement of operations including sales of equipment, sales of services, insurance revenue and their respective costs; statement of financial position including insurance liabilities and annuity benefits, shareholders' equity, property plant and equipment and shares outstanding; and the statement of cash flows. — FY2025 · publ. January 2026 · source ↗
  13. ReportedA services backlog of $178,705 million releasing over fifteen years is a claim on the 2030s that very few companies can offer.
    GE Aerospace Form 10-Q for the quarter ended June 30, 2026, Management's Discussion and Analysis — consolidated revenue, profit and earnings per share, the segment results for Commercial Engines & Services and Defense & Propulsion Technologies, commercial engine and LEAP unit deliveries, internal shop visit revenue growth, the remaining performance obligation and its equipment and services split, the supply chain, tariff and Middle East discussions, and the planned $1 billion US manufacturing investment and 5,000 US hires. — Q2 2026 · publ. July 2026 · source ↗
  14. ReportedUse the measure the company guides on: adjusted earnings per share of $7.65 to $7.85 for 2026, against $6.37 in 2025.
    GE Aerospace second-quarter 2026 earnings release (Exhibit 99.1 to Form 8-K of July 16, 2026) — total company GAAP and non-GAAP results, segment revenue, orders and operating profit, free cash flow, the raised full-year 2026 guidance for adjusted revenue growth, operating profit, adjusted earnings per share and free cash flow, the LEAP-1B durability kit certification, the XA102 and GE426 defence programmes, the NASA hybrid-electric ground tests, and the chief executive's commentary. — Q2 2026 · publ. 16 July 2026 · source ↗
Sources
Generated September 23, 2026