Will Strength in Defense & Propulsion Unit Continue to Drive GE's Momentum?
GE AerospaceGE is benefiting from persistent strength in its Defense & Propulsion Technologies segment. After experiencing growth of 11% in 2025, revenues from the segment increased 19% year over year in first-quarter 2026. The surge in revenues was driven by the growing popularity for GE’s propulsion & additive technologies, critical aircraft systems and aftermarket services in the defense sector.
Some of the notable contracts secured by the company include a deal from Boeing Defence UK for the extension of support services for T700-GE-T701D engines. GE will be responsible for providing logistics management, repair, maintenance and technical support services for these turboshaft engines. Also, it entered into a multi-year partnership with Palantir Technologies Inc.PLTR to improve the fleet management and operational readiness of the U.S. Air Force’s military aircraft.
The strong pipeline of projects boosted the Defense & Propulsion Technologies segment’s orders, which surged 67% in the first quarter on a year-over-year basis. The segment’s operating profit grew 17% to $379 million.
It's worth noting that the fiscal year 2026 Defense Appropriations Act was signed into law in February 2026, providing a strong budgetary allocation for defense. Such robust provisions set the stage for GE Aerospace, which remains focused on its defense business.
Backed by favorable geopolitical developments and consistent government support, the company’s Defense & Propulsion Technologies segment is well-placed for growth in the quarters ahead. For 2026, GE expects revenues from the Defense & Propulsion Technologies segment to increase in the mid-to-high single-digit range.
GE's Peers in the Defense Market
Howmet Aerospace Inc.HWM is benefiting from strong momentum in its defense aerospace market. After experiencing growth of 21% in 2025, revenues from the defense aerospace market increased 10% year over year in first-quarter 2026. The surge in revenues was driven by the solid demand for engine spares, particularly related to the F-35 program, and an increase in orders for legacy fighter jet spares.
Northrop Grumman’s NOC defense market is playing an important role in driving its overall growth. In first-quarter 2026, revenues from Northrop’s Defense Systems segment climbed 5.2% year over year to $1.90 billion. This improvement was driven by the continued ramp-up of the Sentinel program, as well as the higher volume of tactical solid rocket motor programs and the Integrated Battle Command System portfolio.
GE's Price Performance, Valuation and Estimates
Shares of GE Aerospace have gained 9.8% in the past six months against the industry’s 6.2% decline.
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From a valuation standpoint, GE is trading at a forward price-to-earnings ratio of 43.97X, above the industry’s average of 33.75X. GE Aerospace carries a Value Score of D.
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The Zacks Consensus Estimate for GE’s 2026 and 2027 earnings has increased over the past 60 days.
Image Source: Zacks Investment Research
The company currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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