Morgan Stanley believes that investors are undervaluing the growth potential for GE Aerospace . The bank launched coverage of the aerospace and defense stock with an overweight rating and $425 price target, implying an upside of 32%. Analyst Kristine Liwag applauded GE Aerospace’s durable services growth, strong pricing power and pristine balance sheet. GE 1Y mountain GE 1Y chart “GE Aerospace is a best in class Aerospace and Defense franchise with a deep competitive moat in a long cycle industry defined by high barriers to entry. These traits and the mission critical nature of aircraft engines translate into durable above trend growth and meaningful long term pricing power,” she wrote. “In our view, the company is a structural winner positioned to benefit from ongoing upward revisions to earnings and free cash flow.” Liwag added that current consensus underestimates GE Aerospace’s long-term free cash flow and earnings power, with further upside possible from multiple expansion and earnings revision. She wrote that forecasts exceed consensus by between 8% to 14% from 2027 to 2030, with services growth and aftermarket strength as major drivers, and expects the “positive market enthusiasm” for the stock to persist going forward. The analyst added that despite these growth drivers, shares of GE Aerospace still appear undervalued. “Upside remains via continued estimate revisions, with cumulative 2028–2030 FCF ~12.5% above consensus on mix, pricing, and services momentum,” she said. “Shares trade at ~30% discount to top peers on 2028 P/FCF, based upon our estimates, leaving room for valuation upside alongside higher earnings expectations.” Shares of GE Aerospace have surged 60% over the past 12 months and have popped 9% this year.
