Is GE Stock Still a Buy After Big Earnings Beat?

(Image credit: Hollie Adams/Bloomberg via Getty Images)

GE Aerospace (GE) disclosed upbeat second-quarter earnings ahead of Tuesday's open, sending GE stock soaring up the price charts. The industrial giant also raised its full-year profit and free cash flow forecast and Wall Street has been quick to chime in.

In the three months ended June 30, GE's revenue increased 4% year-over-year to $9.1 billion, driven in part by 7% growth in its commercial engines & services segment to $6.1 billion. Its earnings per share (EPS) was up 62% over the year-ago period to $1.20.

"The GE Aerospace team delivered another strong quarter marked by double-digit increases across orders, operating profit, and free cash flow," GE Aerospace CEO Larry Culp said in a statement.

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The results topped analysts' expectations. Wall Street was anticipating revenue of $8.5 billion and earnings of 98 cents per share, according to Yahoo Finance.

"Given our performance year-to-date and momentum across our businesses we are raising our full-year profit and free cash flow guidance," Culp said.

The company now expects earnings per share in the range of $3.95 to $4.20, up from its previous guidance of $3.80 to $4.05. Free cash flow is now forecast to arrive between $5.3 billion to $5.6 billion, up from the prior outlook of more than $5 billion.

Is GE stock a buy, sell or hold?

The industrial stock has turned in a strong performance on the price charts this year, up more than 70% at last check. The bulk of this upside came amid optimism for the company's spinoff plans, which were completed in April.

But Wall Street remains bullish on GE stock. According to S&P Global Market Intelligence, the average analyst target price for GE Aerospace is $185.67, representing implied upside of 6% to current levels. Additionally, the consensus recommendation is a Strong Buy – making it one of analysts' top-rated S&P 500 stocks.

Financial services firm CFRA Research is one of the more bullish outfits on GE stock with a Buy rating and a new price target of $190 (up from $181) following the earnings release.

CFRA Research analyst Angelo Zino is encouraged by the momentum seen in the company's commercial engines & services segment "as orders for services and equipment both grew 30% on the heels of robust spare parts demand."

He adds that "margins are benefiting from higher services volume, pricing, and mix," and sees "the upwardly revised 2024 revenue, profit, and free cash flow guidance, which we attribute to commercial equipment strength, as improving orders point to better prospects ahead."

CFRA's $190 price target represents implied upside of nearly 9% to current levels.

Joey Solitro is a freelance financial journalist at Kiplinger with more than a decade of experience. A longtime equity analyst, Joey has covered a range of industries for media outlets including The Motley Fool, Seeking Alpha, Market Realist, and TipRanks. Joey holds a bachelor's degree in business administration.