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GE Aerospace

Intrinsic Value Analysis (Discounted Cash Flow)Industry: Aerospace & DefenseSector: Industrials

Fair Value Summary

Current Price$300.97
5Y Range-50.68 – -37.83
5Y Selected-44.26
(-) Safety Margin84.12%
5Y Buy Price$-7.03
Upside (to Buy Price)-102.34%
10Y Range-40.56 – -32.74
10Y Selected-36.65
(-) Safety Margin84.12%
10Y Buy Price$-5.82
Upside (to Buy Price)-101.93%

Company Predictability & Safety

MetricValue
Revenue R2 (5Y)0.6298
Revenue R2 (10Y)0.9215
Net Income R2 (5Y)0.1967
Net Income R2 (10Y)0.1876
EBITDA R2 (5Y)0.0400
EBITDA R2 (10Y)0.0113
FCF R2 (5Y)0.5549
FCF R2 (10Y)0.0071
Safety Score0.1588

DA 10-Year Projection

Metric2025202620272028202920302031203220332034
% Growth-16.75%-14.45%-12.14%-9.83%-7.53%-5.22%-2.92%-0.61%1.69%4.00%
Revenue32,218.9527,564.7524,218.4421,836.7620,192.7919,138.1718,579.9018,466.3018,779.1819,530.35
EBITDA7,886.276,747.065,927.985,345.014,942.624,684.474,547.834,520.024,596.604,780.47
D&A-2,007.41-1,717.43-1,508.94-1,360.54-1,258.12-1,192.41-1,157.62-1,150.55-1,170.04-1,216.84
EBIT5,878.865,029.634,419.043,984.473,684.503,492.073,390.203,369.473,426.563,563.63
Pro forma Taxes-8,898.10-7,612.72-6,688.55-6,030.79-5,576.76-5,285.50-5,131.32-5,099.95-5,186.36-5,393.81
NOPAT-3,019.23-2,583.09-2,269.50-2,046.32-1,892.26-1,793.43-1,741.12-1,730.47-1,759.79-1,830.18
Capital Expenditures-1,911.77-1,635.60-1,437.04-1,295.72-1,198.18-1,135.60-1,102.47-1,095.73-1,114.30-1,158.87
NWC Investment-1,415.05-1,015.86-730.39-519.84-358.83-230.19-121.85-24.7968.29163.96
(+) D&A2,007.411,717.431,508.941,360.541,258.121,192.411,157.621,150.551,170.041,216.84
Free Cash Flow-4,338.64-3,517.13-2,928.01-2,501.34-2,191.15-1,966.81-1,807.82-1,700.45-1,635.76-1,608.25
Diluted Shares Outstanding1,074,285,714.251,074,285,714.251,074,285,714.251,074,285,714.251,074,285,714.251,074,285,714.251,074,285,714.251,074,285,714.251,074,285,714.251,074,285,714.25

Discounting Periods

MetricDec-25Dec-26Dec-27Dec-28Dec-29Dec-30Dec-31Dec-32Dec-33Dec-34
Period Start9/30/251/1/261/1/271/1/281/1/291/1/301/1/311/1/321/1/331/1/34
Period End12/31/2512/31/2612/31/2712/31/2812/31/2912/31/3012/31/3112/31/3212/31/3312/31/34
Mid-Point11/15/257/2/267/2/277/1/287/2/297/2/307/2/317/1/327/2/337/2/34
Time (t)0.100.461.462.463.464.465.466.467.468.46
Valuation Date1/16/26

Base Case Projected Flows

WACC: 9.10%Terminal Growth: 2.46%
Metric2025202620272028202920302031203220332034TV (5y)TV (10y)
Discount Factor0.990.960.880.810.740.680.620.570.520.48
PV UFCF-4,301.02-3,379.03-2,578.46-2,019.03-1,621.16-1,333.83-1,123.76-968.88-854.29-769.88
Raw: -33,825.26
-23,959.99
Raw: -24,826.99
-11,378.52

Base Case Valuation

5-Year Horizon10-Year Horizon
UFCFUFCF
Enterprise Value-37,858.70-30,327.87
(-) Net Debt8,135.258,135.25
Equity Value-45,993.95-38,463.12
(/) Shares Out1,074.291,074.29
Fair Value$-42.81$-35.80
(-) Safety Margin84.12%84.12%
Buy Price$-6.80$-5.69
Current Price$300.97$300.97
Upside (to Buy Price)-102.26%-101.89%

Conservative Projected Flows

WACC: 10.10%Terminal Growth: 1.96%
Metric2025202620272028202920302031203220332034TV (5y)TV (10y)
Discount Factor0.990.960.870.790.720.650.590.540.490.44
PV UFCF-4,297.10-3,364.88-2,544.34-1,974.22-1,570.78-1,280.64-1,069.15-913.42-798.08-712.69
Raw: -27,455.36
-18,757.74
Raw: -20,151.63
-8,510.72

Conservative Valuation

5-Year Horizon10-Year Horizon
UFCFUFCF
Enterprise Value-32,509.06-27,036.01
(-) Net Debt8,135.258,135.25
Equity Value-40,644.31-35,171.26
(/) Shares Out1,074.291,074.29
Fair Value$-37.83$-32.74
(-) Safety Margin84.12%84.12%
Buy Price$-6.01$-5.20
Current Price$300.97$300.97
Upside (to Buy Price)-102.00%-101.73%

Aggressive Projected Flows

WACC: 8.10%Terminal Growth: 2.96%
Metric2025202620272028202920302031203220332034TV (5y)TV (10y)
Discount Factor0.990.960.890.830.760.710.650.600.560.52
PV UFCF-4,304.98-3,393.38-2,613.36-2,065.29-1,673.64-1,389.75-1,181.71-1,028.26-915.04-832.26
Raw: -43,914.99
-32,262.26
Raw: -32,232.63
-16,043.15

Aggressive Valuation

5-Year Horizon10-Year Horizon
UFCFUFCF
Enterprise Value-46,312.91-35,440.81
(-) Net Debt8,135.258,135.25
Equity Value-54,448.16-43,576.06
(/) Shares Out1,074.291,074.29
Fair Value$-50.68$-40.56
(-) Safety Margin84.12%84.12%
Buy Price$-8.05$-6.44
Current Price$300.97$300.97
Upside (to Buy Price)-102.67%-102.14%

Reverse DCF: Market Implied Growth

Current Price$300.97
WACC Used9.1%
IMPLIED REVENUE GROWTH154.31%
Metric2027202820292030203120322033203420352036
Implied Revenue111,865.48284,484.07723,468.831,839,846.954,678,897.8911,898,862.2730,259,887.4276,953,641.93195,700,100.38497,683,128.80
Constant Implied Growth154.31%154.31%154.31%154.31%154.31%154.31%154.31%154.31%154.31%154.31%
Implied Free Cash Flow11.1928.4572.35183.98467.891,189.893,025.997,695.3619,570.0149,768.31
Discount Factor0.930.810.740.680.620.570.520.480.440.40
Present Value of Implied FCF10.4122.9653.53124.77290.85677.971,580.353,683.838,587.0520,016.55

Rolling Historical DCF (Backtest)

Valuation based on actual realized growth.
YearValuation DateActual PriceRealized Growth (5Y)Calculated Fair ValueValuation Delta
20192019-12-31$55.56-17.89%$-37.91-168.23%
20182018-12-31$36.23-28.29%$-80.04-320.93%
20172017-12-31$83.51-28.99%$-75.39-190.28%
20162016-12-31$151.22-14.15%$-129.47-185.62%
20152015-12-31$149.07-9.53%$-3.87-102.59%
20142014-12-31$120.93-3.97%$-12.26-110.14%
20132013-12-31$134.14-0.83%$-58.86-143.88%
20122012-12-31$100.452.61%$-48.02-147.80%
20112011-12-31$85.710.04%$-42.96-150.12%
20102010-12-31$87.53-4.56%$-58.19-166.48%
20092009-12-31$72.40-5.92%$-191.65-364.72%
20082008-12-31$77.53-6.32%$-85.27-209.99%
20072007-12-31$177.40-6.37%$-142.78-180.49%
20062006-12-31$178.07-7.25%$-206.40-215.91%
20052005-12-31$167.73-2.38%$-36.13-121.54%
20042004-12-31$174.674.56%$58.66-66.42%
20032003-12-31$148.269.37%$135.47-8.63%
20022002-12-31$116.539.41%$75.05-35.60%
20012001-12-31$191.803.29%$53.24-72.24%
20002000-12-31$229.410.01%$-49.95-121.77%
19991999-12-31$246.85-1.54%$-186.49-175.55%
19981998-12-31$162.71-0.02%$-12.01-107.38%
19971997-12-31$117.046.35%$-18.56-115.86%
19961996-12-31$78.869.38%$80.692.32%
19951995-12-31$57.4312.80%$85.2248.39%

Monte Carlo Simulation (1,000 Iterations)

Mean Fair Value
$-36.25
Median
$-35.79
10th Percentile
$-40.59
90th Percentile
$-32.61

Fair Value Distribution

$-57.15 - $-55.74
1
$-55.74 - $-54.33
0
$-54.33 - $-52.93
2
$-52.93 - $-51.52
1
$-51.52 - $-50.11
3
$-50.11 - $-48.70
1
$-48.70 - $-47.29
2
$-47.29 - $-45.88
3
$-45.88 - $-44.47
5
$-44.47 - $-43.06
16
$-43.06 - $-41.66
27
$-41.66 - $-40.25
48
$-40.25 - $-38.84
72
$-38.84 - $-37.43
109
$-37.43 - $-36.02
176
$-36.02 - $-34.61
189
$-34.61 - $-33.20
190
$-33.20 - $-31.79
109
$-31.79 - $-30.39
43
$-30.39 - $-28.98
3