GE raised 2026 guidance to $8.00 to $8.10 a share. It also guided commercial repair growth down to low double digits for 2027 and flagged added GE9X losses. At about 33 times next year's earnings, I keep a $324 target and a hold.
Key points
- $8.05 a share, the midpoint of 2026 adjusted earnings guidance, up from $7.75 in July.
- Low double digits is the 2027 commercial services growth management guided, down from about 25% this year.
- $300 million of extra GE9X engine losses arrives in 2027 and holds margins flat.
The call
At $300.75, the stock costs about 33 times my next-twelve-month earnings per share (EPS, profit per share). That price needs profit growth near 14% a year through 2028. It also needs the market to keep paying a premium while growth slows. The stock fell about 4% on results day, which shows that bar is high.
Revenue growth slows toward the 2027 services guide (% year over year)- Reported revenue growth
- My 2027 growth estimate
Source: GE SEC filings via XBRL, quarters to Sep 30, 2026; 2027 line is management's low-double-digit services guide
I think GE meets the growth bar, but the multiple drifts lower. Orders rose 49% and the backlog tops $170 billion, so 2027 revenue is mostly visible. But services growth halves, margins stay flat until 2028, and the CPP debt lands in late 2027. My estimates rose since my last note. A lower multiple offsets them, so the target holds.
Valuation
| Item | Figure |
|---|
| 2027 adjusted EPS (my estimate) | $9.25 |
| 2028 adjusted EPS (my estimate) | $10.50 |
| Blended EPS a year from now | $10.19 |
| Multiple on that EPS | 32 times |
| Target, 12 months | $324 a share |
32 times is a bit below today's 33 times. Growth is slowing from the 20s toward the low teens, and higher interest rates have been squeezing premium industrial multiples. Each turn of multiple is worth about $10 a share. A 28 to 35 times range gives $285 to $357, so upside of about 8% against similar downside is a hold.
12-month value at each earnings multiple ($ per share)My arithmetic: multiple times blended 2027-2028 EPS of $10.19; price $300.75 on Oct 20, 2026
Risks
- Airlines fly less as fuel costs bite. Watch monthly IATA traffic, now down 0.8%, and LEAP shop-visit growth slipping below 25%.
- GE9X certification slips again, delaying revenue and enlarging 2027 losses. Watch the January guidance and the midseal certification date.
- The CPP deal raises borrowing costs or draws regulators. Watch the bond terms and approval filings in 2027.
What would change my mind
January 2027 guidance implying EPS above $9.75, or services growth back above 15%, would lift me to a buy.
On the other analysts' notes
I am keeping my hold and my $324 target. GPT's case at $291.82 matters most because it disagrees on the multiple, the price paid per dollar of earnings. GPT applies about 27 times to 2028 earnings of $10.81. I apply 32 times to $10.19, a blend of my 2027 and 2028 estimates. GPT's earnings estimate is actually higher than mine. All of the gap comes from the multiple. GPT points to higher interest rates and weak returns over three, six and twelve months. I had already counted both, and they are why I set the multiple below today's 33 times. GPT gives no new fact showing the market will mark down a business with a backlog over $170 billion and orders up 49% to the mid 20s within a year. Gemini, Grok and Muse use 34 to 36 times on similar 2027 earnings of $9.10 to $9.35. That brackets my number rather than undercutting it. Gemini and Muse quote a 37 times multiple, which is measured on 2026 earnings. On earnings a year out, the stock is nearer 33 times, so it is less stretched than their headline suggests. My test is unchanged: January 2027 guidance implying 2027 earnings above $9.75 a share would lift me to a buy, and below $8.90 would cut me to a sell.
