2026년 2월 20일 · Unknown · financial · 출처 Yahoo Finance
Investing.com -- Morgan Stanley initiated coverage of GE Aerospace with an Overweight rating and a $425 price target, saying the market underestimates the its long term free cash flow and pricing power. Shares of the jet engine maker gained 1.5% in Friday premarket trading.
GE Aerospace, which became a standalone company in April 2024, combines durable services growth with a strong balance sheet and a deep competitive moat in a long cycle industry.
Aircraft engines are mission critical products with high barriers to entry, that has supported sustained pricing power and above trend growth.
Morgan Stanley’s $425 target is based on 2028 estimated free cash flow per share of $10.85 at a roughly 39x multiple. The bank sees a bull case of $615 and a bear case of $230, implying what it calls a favorable risk reward skew.
Morgan Stanley forecasts free cash flow of $9.8 billion in 2027, $11 billion in 2028, $12.2 billion in 2029 and $13.5 billion in 2030. Those estimates are 8% to 14% above consensus between 2027 and 2030. The bank said cumulative 2028 to 2030 free cash flow is about 12.5% above consensus, driven by services growth, a rising installed base, more engine shop visits and continued aftermarket pricing strength.
It also expects further upward revisions to earnings and cash flow estimates, noting that consensus forecasts for 2027 and 2028 free cash flow have already been trending higher.
GE Aerospace trades at about a 30% discount to leading commercial aerospace peers on a 2028 price to free cash flow basis.
That gap leaves room for multiple expansion alongside higher earnings expectations, analysts at Morgan Stanley said.
The bank added that GE Aerospace’s net debt to EBITDA is projected at 0.7x in 2027, which it described as providing flexibility for capital deployment.
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