GE Aerospace Company Financial Analysis

Company Overview

GE Aerospace is a global provider of jet engines, aircraft systems, and digital solutions for commercial and military aviation. It operates across two primary segments: Commercial Engines & Services (CES) and Defense & Propulsion Technologies (DPT) (GE Aerospace Annual Report, 2024). The company designs, manufactures, and services products for aircrafts. According to its 2024 annual report, it employs 53,000 people globally, serving customers in around 120 countries. While GE has contributed to aerospace since the late 20th century, it became a stand-alone company on April 2nd, 2024.

Under CES, the company serves commercial clients, supplying Boeing with engines like the GE9X ( most powerful commercial jet engine), GEnx (fuel-efficient), and the LEAP engine used by both Boeing and Airbus (GE Aerospace, 2024). The DPT segment provides propulsion systems for military aircraft, powering two-thirds of the U.S. military’s combat and helicopter fleets (GE Aerospace Annual Report, 2024, p. 10). Notably, the F404 is a key product, with over 4,000 engines delivered and used across 16 nations (GE Aerospace, F404Engine).

Despite widespread adoption, GE Aerospace faces competition from firms like RTX Co., Boeing Co., and Lockheed Martin Corp. (Statista, 2025). This drives GE’s need for growth to maintain its leadership in a rapidly evolving industry. According to Deloitte’s “2025 Aerospace and Defense Industry Outlook,” the sector is being shaped by AI integration, workforce digitalization, advanced air mobility, and increased defense spending. Technological progress is enhancing operational efficiency, while digital tools help address labor shortages amid rising global defense demand (Berckman et al., 2024).

These shifts create both opportunities and challenges, pushing companies to adapt, manage risks, and innovate to remain competitive. As GE Aerospace begins its journey as an independent entity, it remains well-positioned for continued growth and success.

Financial Analysis

Debt Structure

As of December 31st, 2024, General Electric has a near 1:1 Debt to Equity ratio at 51% and 48.4% of total capital, respectively (S&P Capital IQ, 2025). Compared to its peers, General Electric’s 51% Debt-to-Capital ratio is actually relatively conservative compared to other companies in its industry. The average Debt-to-Capital ratio amongst its public industry peers is 58.3%. This entails that General Electric has a lower financial leverage than some of its competitors, which decreases both the volatility and return of its investments. It has a net debt/EBITDA ratio of just 0.66, which is excellent compared to its industry average of 2.1. It also had a EBITDA/Interest expense ratio of 9.56, which means that General Electric can comfortably cover its interest payments. It has a total debt outstanding amount of 20.38 billion dollars, which has been steadily decreasing over the past two years. The vast majority, about 92.5%, of its debt comes from senior or subordinated bonds and notes. 

GE’s debt repayments are also well-distributed from now until December 31, 2029. According to Capital IQ’s capital structure data, its amount of long term debt maturing at the end of each year from 2025 to 2029 is $2.039 billion, $1.304 billion, $1.493 billion, $452 million, $1.445 billion, respectively. There is not a single year that has an uncharacteristically large debt repayment due that exceeds 10.0% of the total company debt amount. (See Table 1 in Appendix) 2025 seems to be the year where GE will see the heaviest interest rate expense and debt repayment. Its EBITDA in 2024 was $8.9 billion, which is around 8x its long term debt that matured last year. Assuming its average 17.13% growth rate in the past three years for its future, General Electric will generate more than enough earnings to pay off its debt maturing each year from now until the end of 2029. This reduces refinancing risk in the short term, especially in a rising interest rate environment. 

GE also has over 61.5% of its debt in corporate bonds and notes maturing after 2030. This creates stability in debt servicing and helps in planning cash flows over the long term. However, if interest rates fall, GE could be locked into higher rates compared to what’s available in the market, potentially leading to higher financing costs relative to new issuances.

Dividend Policy (Distributions to Shareholders)

Based on the dividend policies and payout ratios it can be assessed that in the first two years the company was clearly focused on reinvesting in growth, evident by the low payout ratios, but then in the following three years the firm was in a more stable position and able to payout significantly larger dividends. The average quarterly payout ratio in the first year was 2.6%, going up to 2.8%, then 27.1%, followed by 124.15%, and 11.5%. The average quarterly shareholder yield in 2020 was $0.04, followed by $0.07 in 2021, $0.83 in 2022, $3.46 in 2023, and $1.12 in 2024. The net income not increasing in the later periods confirms that 2020 and 2021 were both reinvestment years as there was more, or similar profit but significantly lower payout. In the later years the business is clearly more mature evident by the larger payouts implying more stability. The full dividend ratio chart can be found on the Dividends page of the attached workbook. 

WACC

GE Aerospace’s Weighted Average Cost of Capital (WACC) is estimated at 8.84%, representing the blended rate of return required by both equity and debt investors. It serves as a benchmark for assessing financial competitiveness by defining the minimum return needed to justify investments. To evaluate GE’s positioning, its WACC was compared with key industry peers: Raytheon Technologies (6.71%), Lockheed Martin (6.48%), and Boeing (7.87%). GE’s higher WACC suggests a greater overall cost of capital.

This could stem from several factors. GE’s capital structure is heavily equity-based, which is more expensive than debt. Its recent restructuring and standalone status may elevate perceived risk, raising its beta and cost of equity. GE’s debt is also priced using market-based yield-to-worst values, potentially higher than those of more established defense firms with stronger credit ratings.

Strategically, GE’s higher WACC implies a higher hurdle rate for new investments. Projects must exceed 8.84% in expected returns to create value. In contrast, competitors with lower WACCs can accept projects with more modest returns, giving them a potential edge in capital-intensive innovation like propulsion technologies or digital aerospace systems.

However, a higher WACC isn’t necessarily negative. It may reflect a growth-focused equity strategy and restructuring phase. As GE Aerospace matures, improvements in credit quality, earnings consistency, or capital mix could help align its WACC more closely with industry benchmarks.

GE Aerospace’s ESG Commitments

GE Aerospace outlines its ESG goals and commitments in the 2024 Sustainability Report. Environmentally, the firm targets Net Zero for direct emissions by 2030 and for indirect emissions by 2050. It supports Sustainable Aviation Fuel (SAF) and fuel-efficient engine development, positioning innovation at the core of its sustainability mission. While GE promotes environmental initiatives, it falls short of fully aligning with the Science-Based Targets initiative (SBTi), limiting credibility and transparency for industry comparisons (Corts, 2024, October 3 2024, slide 14). Its reliance on carbon offset credits also raises questions about verifiability and effectiveness in reducing emissions (Corts, 2024, October 3 2024, slide 13). Validating Net Zero targets through the SBTi framework would strengthen its climate commitments.

Socially, GE Aerospace enforces strong Human Rights policies, prohibiting child labour and discrimination while promoting equity, diversity, and inclusion (GE Aerospace Sustainability, 2025). In addition to internal enforcement, it contractually binds suppliers to the same standards and invests in leadership programs, workforce development, and safety initiatives. Employee Resource Groups (ERGs) further support inclusivity and employee engagement (GE Aerospace Sustainability, 2025).

The firm operates under strict governance policies to ensure transparency and uphold ethical leadership. ESG oversight is led by the Board of Directors but shared across various roles. Audits and compliance committees support adherence to financial reporting standards, risk frameworks, and regulations. Employees are guided by a code of conduct covering anti-corruption, ethical sourcing, and more. Supplier audits further ensure ESG accountability.

Valuation and Future Direction

DCF Valuation - All data is from Capital IQ 

We used a bottom-up approach in our DCF analysis based on growth expectations for GE Aerospace’s key revenue drivers. We expect long-term demand for commercial airline products and heavy capex investments to drive product development and revenue growth (see appendix for projections). We assume relatively stable gross margins (over the next few fiscal years), SG&A, R&D, and other adjustments in calculating free cash flow. Our DCF analysis yielded an implied downside of -34.51%, suggesting potential overvaluation. Our sensitivity analysis reveals that the implied share price is below the current market price even with a lower WACC and higher long-term terminal growth. 

We believe DCF is an appropriate framework to valuate GE and its industry peers. Companies in Commercial Engine Systems and Defense Propulsion Technologies differ in offerings but share a focus on R&D, contract competitiveness, and long-term free cash flow generation - conditions where a DCF framework excels in incorporating growth assumptions to reach an implied firm value. 

Market Comparables Valuation

We began by comparing GE to 10 industry peers using historical (Last 12 Months) data to base our valuations on existing market sentiments rather than assumptions. Amongst them, TransDigm Group (TDG) stood out due to its unusually high multiples such as a 12.0x EV/Revenue ratio that is more than 3 times higher than the average of 3.7x. This stems from TDG’s unique business model: it operates like a private equity by purchasing niche airplane part manufacturers, then boosting profitability through price hikes or cost cuts. After excluding TDG, we aalysed data from nine of GE’s peers, plus GE itself (See Table 2 in Appendix). We calculated four different values of GE based on the valuation multiples: EV/Revenue, EV/EBITDA, EV/EBIT and P/E. Averaging these yielded an implied per-share value of $130.96. (See Table 3 in Appendix). This is notably below the current market price of $197.40, indicating that GE is likely overvalued by nearly one-third based on current market sentiment.

Future Direction

We proposed a distressed (conglomerate) acquisition of the German electrical vertical take-off and landing aircraft (eVTOL) jet developer Lilium N.V. The acquisition may grant GE direct access to the European aviation industry, while related hybrid and electric engine technologies may offer synergy with GE’s other ongoing eco-friendly projects, such as GE’s sustainable commercial jet engine development.

A comparable transaction is Lockheed Martin’s acquisition of Sikorsky in 2015. The effective price was estimated at USD 7.1 billion after taking factors such as tax benefits into account, yielding an EV/EBITDA multiple of 10.3X (Securities and Exchange Commission, 2015). Lilium’s EBITDA is USD 344.8 million, making an appropriate acquisition price around USD 3.6 billion. To finance the acquisition, GE should probably issue shares. Not only does GE’s high equity capital structure indicate a low-debt strategy, its stocks are also currently overvalued. While this would likely dilute share values in the short run, the long-term gains would likely offset this dilution.

         Alternatively, GE Aerospace could pursue a joint venture with Boeing to develop AI-powered aircraft health monitoring systems. GE can adopt a “Software as a Service” (SaaS) model where airports or airplane manufacturers are regularly charged for using GE’s aircraft health monitoring services. GE gains steady revenues, while Boeing improves its reputation through more efficient aircraft health analysis. 

         Between the two acquiring Lilium is preferable for long-term growth and shareholder value creation. The eVTOL industry is projected to reach around 109.75 billion USD by 2033, offering a hedge against declining demand for conventional jet engines (Precedence Statistics, 2025). It could also attract ESG-focused investors and boost confidence through innovation in a high-growth sector.

         Although  GE is currently insolvent (Alcock, 2025), an acquisition, rather than an Asset Purchase Agreement (APA), ensures the transfer of Lilium’s intellectual property (IP) such as its 40+ published patents (Securities and Exchange Commission, n.d.) and certifications (Lilium, 2023). 

Appendix

Table 1

Fixed Payment Schedule	% of Total Debt
LT Debt (Incl. Cap. Leases) Due +1	2,039.0 10.0%
LT Debt (Incl. Cap. Leases) Due +2	1,304.0 6.4%
LT Debt (Incl. Cap. Leases) Due +3	1,493.0 7.3%
LT Debt (Incl. Cap. Leases) Due +4	452.0 2.2%
LT Debt (Incl. Cap. Leases) Due +5	1,445.0 7.1%
LT Debt (Incl. Cap. Leases) Due, Next 5 Yrs	6,733.0 33.0%
LT Debt (Incl. Cap. Leases) Due, After 5 Yrs	12,540.0 61.5%

Table 2

Company Name	TEV/Total Revenues LTM ‑ Latest	TEV/EBITDA LTM - Latest	TEV/EBIT LTM - Latest	P/Diluted EPS Before Extra LTM ‑ Latest
Textron Inc. (NYSE:TXT)	1.2x	10.2x	14.4x	16.9x
Northrop Grumman Corporation (NYSE:NOC)	2.0x	11.5x	15.3x	17.1x
RTX Corporation (NYSE:RTX)	2.6x	16.1x	25.2x	36.6x
L3Harris Technologies, Inc. (NYSE:LHX)	2.4x	12.5x	19.7x	26.8x
General Dynamics Corporation (NYSE:GD)	1.7x	13.3x	16.7x	19.2x
Lockheed Martin Corporation (NYSE:LMT)	1.8x	14.8x	17.8x	20.9x
The Boeing Company (NYSE:BA)	2.3x	NM	NM	NM
Safran SA (ENXTPA:SAF)	3.7x	18.6x	24.8x	NM
Howmet Aerospace Inc. (NYSE:HWM)	7.3x	27.8x	33.7x	45.0x
General Electric Company (NYSE:GE)	5.6x	22.7x	27.5x	32.5x
Summary Statistics	TEV/Total Revenues LTM ‑ Latest	TEV/EBITDA LTM - Latest	TEV/EBIT LTM - Latest	P/Diluted EPS Before Extra LTM ‑ Latest
High	7.3x	27.8x	33.7x	45.0x
Low	1.2x	10.2x	14.4x	16.9x
Mean	2.8x	15.6x	21.0x	26.1x
Median	2.3x	14.0x	18.8x	20.9x

Table 3

	Multiple	Financial Metric	Enterprise Value	Net Debt	Equity Value	# of Shares Outstanding	Share Price
EV/Sales	2.8	38702	108365.6	6177	102188.6	1073.3	95.20972701
EV/EBITDA	15.6	8941	139479.6	6177	133302.6	1073.3	124.1988261
EV/EBIT	21	7757	162897	6177	156720	1073.3	146.016957
P/E(Diluted EPS)	26.1	6.07	N/A	N/A	N/A	1073.3	158.427
						Average Share Price	130.9631

Works Cited

Alcock, C. (2025, February 27). Lilium Closes eVTOL Business as New Investment Falls Through. Aviation International News. https://www.ainonline.com/aviation-news/futureflight/2025-02-21/lilium-closes-evtol-business-new-investment-falls-through 

Berckman, L., Chavali, A., Hardin, K., Sloane, M., & Dronamraju, T. (2024, October 23). 2025 aerospace and Defense Industry Outlook. Deloitte Insights.

https://www2.deloitte.com/us/en/insights/industry/aerospace-defense/aerospace-and-defense-industry-outlook.html 

Corts, K. S. (2024, October 3). Sustainable strategy [PowerPoint slides].                                 RSM497: Sustainable Strategy, Rotman Commerce, University of Toronto.

F404Engine. GE Aerospace. (n.d.).                 https://www.geaerospace.com/military-defense/engines/f404 

GE Aerospace Sustainability. (n.d.). Sustainability in aviation. GE Aerospace. https://www.geaerospace.com/sustainability 

GE Aerospace. (2025). GE Aerospace 2024 Annual report. https://www.geaerospace.com/investor-relations/annual-report 

LILIUM N.V. Sec.gov. (n.d.). https://www.sec.gov/Archives/edgar/data/1855756/000110465922120076/tm2230586d3_ex99-1.htm 

Lilium receives EASA Design Organization Approval. Lilium. (2023, November 27). https://lilium.com/newsroom-detail/lilium-receives-easa-design-organization-approval 

Lockheed Martin Corporation. Securities and Exchange Commission. (2015, July 20). https://www.sec.gov/Archives/edgar/data/936468/000114420415043188/v415620_ex99-3.htm 

Precedence Statistics. (2025, February 17). Evtol aircraft market size to worth USD 170 billion by 2034. Yahoo! Finance. 

https://finance.yahoo.com/news/evtol-aircraft-market-size-worth-150900065.html

S&P Capital IQ. (2025). Capital structure summary for General Electric, Inc. Retrieved March 16, 2025, from S&P Capital IQ database.

S&P Capital IQ. (2025). Quick Comps for General Electric Inc. Retrieved March 26, 2025, from S&P Capital IQ database.

Statista Research Department,. (2025, January 22). Leading aerospace and defense manufacturers in the U.S. | statista. Statista. https://www.statista.com/statistics/257349/leading-aerospace-and-defense-manufacturers-us/