Think GE Aerospace Is Expensive? This Chart Might Change Your Mind.

GE Aerospace (NYSE: GE) trades at 33.6 times Wall Street estimates for 2025 earnings. That valuation might seem excessive, but it's crucial to note GE delivers an essential product (commercial airplane engines are its most important revenue generator) in a business with incredibly high barriers to entry, and GE is the leading player in it.Here's why the stock deserves a premium rating.Selling airplane engines isn't really a profitable business, as engines are typically sold at a loss. The major commercial engine manufacturers, such as GE Aerospace, RTX, and Rolls-Royce, make their money through the long-term stream of higher-margin aftermarket/services revenue generated on long-term contracts. Given that airplane engines can be utilized for over 40 years, it's clear GE will generate a long tail of earnings and cash flow for every engine sold or already installed in the global airline fleet.Continue readingWeiter zum vollständigen Artikel bei MotleyFool Weiter zum vollständigen Artikel bei MotleyFool