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General Electric (GE) is set to become a pure space and aviation company following its spin-off.
General Electric (GE) has undergone a significant restructuring of its business since 2018, which has involved asset sales and other means of realignment. As a result, it has split its operations into three divisions: aviation (GE Aerospace), energy (GE Vernova), and healthcare (GE Healthcare). In 2021, it announced further plans to divide its healthcare and energy businesses. On January 4, 2023, it spun off its healthcare business, GE Healthcare (GEHC), and listed it on NASDAQ. It plans to list its energy business, GE Vernova (GEV), on the New York Stock Exchange on April 2, 2024.
After GE Vernova is listed on the New York Stock Exchange in April, General Electric will only have its GE Aerospace division left, which will handle the company’s space and aviation business. Additionally, the company will change its name from General Electric to GE Aerospace.
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“The demand for air travel is increasing, leading to an increase in aircraft orders and deliveries from Airbus and Boeing,” said Choi Won Suk, a researcher at Shinhan Investment Securities. “After the war between Russia and Ukraine, global nations’ defense spending is also increasing, boosting the demand for commercial aircraft and military fighter and transport aircraft engines,” he pointed out.
GE Aerospace is expected to experience double-digit sales growth in 2024 and 2025. This is due to the rising demand for new aircraft engines. Once the engines are supplied, the revenue from maintenance, repair, and overhaul (MRO) services -could last for more than 20 years. According to the current analysis, 66% of the revenue is generated from these services.
Researcher Choi said, “The company will outperform the S&P 500 in the medium to long term as stable sales continue to occur from the engines already supplied, in addition to the increase in engine supply due to the increase in new aircraft demand.”
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