GE Aerospace’s robust earnings have reignited the forgotten trade of 2024
The shares are up more than 20% so far this year after nearly doubling over the last 12 months.
Jet engine maker GE Aerospace is the top-performing stock in the S&P 500 as of 2:15 p.m. ET after posting stellar earnings.
The company — created when CEO Larry Culp cracked industrial conglomerate General Electric into three separate entities, including GE HealthCare and turbine builder GE Vernova, over the last couple of years — trounced EPS expectations and bested revenue forecasts as well.
It was the company’s best single quarter as a stand-alone entity.
The shares have also been on a roll, up more than 20% so far this year and nearly doubling over the last 12 months.
GE isn’t the only aerospace parts provider that’s been doing well. One of the better-performing trades of 2024 was in the shares of companies like Howmet Aerospace (up about 125% over the last year), Woodward (up 38%), and Parker-Hannifin (up 45%).
Such companies have been big beneficiaries of the ongoing struggles Boeing has faced in getting its 737 Max straightened out. While aerospace parts makers do get pinched by those problems a bit, since they make parts for new Boeing planes, they also provide the replacement parts for the existing fleet. Barron’s explained recently why that’s been a good business, writing:
“Less new planes mean more old planes flying longer and aftermarket parts and service is typically a much higher margin business than profits earned on new equipment.”
