GE Aerospace Will Earn More Than We Expected: Wells Fargo (NYSE:GE)

GE Aerospace (New York Stock Exchange:GE) is likely to be more profitable this year than previously expected, analysts at financial services firm Wells Fargo said as they revised their forecasts for the jet engine maker.

“We continue to view GE’s 2024 guidance as sound. “We are raising our estimates by approximately $0.02, assuming a decline in supply of new, loss-making engines,” Wells Fargo analyst Matthew Akers wrote in a June 28 report.

The revisions come as investors “appear to be concerned” about the jet engine maker, according to Wells. This comes especially after aviation giant Airbus (OTCPK:EADSY)(OTCPK:EADSF) reduced its delivery target for this year to 770 planes from 800 previously. Digging. Engine manufacturers may be cushioned somewhat from a decline in new engine deliveries because they realize most of their profits from the parts and maintenance aftermarket, the bank said.

While Wells Fargo raised its earnings estimates for GE Aerospace (GE) this year, the bank lowered its earnings estimates for the recently completed second quarter.

“We have reduced GE’s second quarter revenue estimates by approximately 5% due to lower engine deliveries,” according to Wells Fargo. “While our 2024 EPS estimates are actually higher due to fewer loss-making deliveries, we do not anticipate a meaningful impact on the aftermarket side of GE’s commercial engines business.”

Wells Fargo lowered its earnings estimates for RTX (RTX), a Pratt & Whitney unit that makes jet engines.