Strength in Defense & Propulsion Unit Drives GE Aerospace: Can It Sustain?

GE Aerospace GE is benefiting from solid momentum in its Defense & Propulsion Technologies segment. Growing popularity for the company’s propulsion & additive technologies, critical aircraft systems and aftermarket services in the defense sector is driving the segment’s performance.

During 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. It successfully tested the T901 engine on a Black Hawk helicopter and completed the design review for the new XA102 engine. The company also clinched an order with Hindustan Aeronautics to supply 113 F404 engines.

The Defense & Propulsion Technologies business’ revenues increased 11% year over year and orders grew 19% in the year. Rising U.S. & international defense budgets and heightened geopolitical tensions, along with positive airline & airframer dynamics and robust demand for commercial air travel, will augur well for GE Aerospace in the quarters ahead. For 2026, it expects adjusted revenues from the defense and propulsion technologies unit to increase in the mid-to-high single-digit range.

GE's Peers in the Defense Market

Among its major peers, Howmet Aerospace Inc.’s HWM defense aerospace market is playing an important role in driving its overall growth. In the fourth quarter of 2025, Howmet’s revenues from the defense aerospace market jumped 20% year over year, which accounted for 17% of its total sales. The surge in revenues was fueled by robust demand for Howmet’s engine spares, particularly related to the F-35 program and an increase in orders for new builds and legacy fighter jet parts.

Its another peer, RTX Corporation RTX, is witnessing solid bookings and backlog levels. RTX’s management continues to expect both domestic and international program growth to remain robust for its defense business in the upcoming quarters. RTX’s strong backlog supports a positive outlook for revenue growth in its defense business, which is expected to strengthen profits over the long term.

GE's Price Performance, Valuation and Estimates

Shares of GE Aerospace have surged 17.5% in the past six months compared with the industry’s growth of 11.2%.

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From a valuation standpoint, GE is trading at a forward price-to-earnings ratio of 41.57X, above the industry’s average of 32.67X. GE Aerospace carries a Value Score of D.

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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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This article originally published on Zacks Investment Research (zacks.com).

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