GE's Defense & Propulsion Unit Gains Momentum: Can It Sustain?

GE Aerospace GE is witnessing persistent strength in its Defense & Propulsion Technologies segment. Robust demand for the company’s propulsion & additive technologies, engines, critical aircraft systems and aftermarket services in the defense sector is driving the segment’s performance.

Recently, GE entered into a partnership with Palantir Technologies Inc. (PLTR) to improve fleet management and boost the operational readiness of military aircraft for the U.S. Air Force. As part of the program, GE will work on improving the readiness of its J85 engine that powers the U.S. Air Force’s T-38 training aircraft. Also, in January, the company clinched a $1.4 billion deal from Naval Air Systems Command to supply T408 engines for the U.S. Marine Corps’ Sikorsky CH-53K King Stallion heavy-lift helicopter.

Apart from this, in 2025, the company secured a $5 billion contract from the U.S. Air Force to supply F110 engines, parts and support services as part of a Foreign Military Sales (FMS) program. Also, GE Aerospace received an Indefinite Delivery Indefinite Quantity (IDIQ) contract from the U.S. Army to supply F110 engines for F-15 and F-16 jets used by allied countries.

Driven by strong bookings, revenues from the Defense & Propulsion Technologies segment increased 11% year over year and orders grew 19% in 2025. Rising U.S. & international defense budgets and heightened geopolitical tensions, along with positive airline & airframer dynamics, will augur well for the segment in the quarters ahead. For 2026, adjusted revenues from the defense and propulsion technologies unit are expected to increase in the mid-to-high single-digit range.

GE's Peers in the Aerospace Market

Among its major peers, Northrop Grumman Corporation's NOC defense market is playing an important role in driving its overall growth. In fourth-quarter 2025, revenues from Northrop’s Defense Systems segment climbed 7.2% year over year to $2.15 billion. The improvement was driven by higher volumes tied to material timing on the Guided Multiple Launch Rocket System, new awards within the Integrated Battle Command System portfolio and higher volume on armament programs.

Its another peer, Textron Inc. TXT enjoys solid demand for its defense products as well. In the fourth quarter of 2025, the company signed a contract to deliver the first two Beechcraft T-6 to Japan's Air Self-Defense Force. In the quarter, revenues from Textron’s Bell segment amounted to $1.3 billion, up 11% year over year due to higher volume on the U.S. Army's MV-75 program.

GE's Price Performance, Valuation and Estimates

Shares of GE Aerospace have surged 51.4% in the past year compared with the industry’s growth of 28.5%.

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From a valuation standpoint, GE is trading at a forward price-to-earnings ratio of 39.55X, above the industry’s average of 32.27X. GE Aerospace carries a Value Score of F.

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The Zacks Consensus Estimate for GE’s 2026 and 2027 earnings has been on the rise over the past 60 days.

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The company currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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Northrop Grumman Corporation (NOC): Free Stock Analysis Report

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