A Look At General Electric’s Valuation As Earnings Expectations And Contract Wins Support Optimism
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General Electric (GE) stock is in focus as investors look ahead to GE Aerospace’s fourth quarter 2025 earnings, with sentiment shaped by recent contract wins, operational investments, and past earnings surprises.
See our latest analysis for General Electric.
The recent 1 day share price return of 1.97% to US$318.50 comes after a year shaped by GE Aerospace’s engine deals, new leadership appointments and defense contract activity. The 1 year total shareholder return of 70.05% and very large 3 year and 5 year total shareholder returns suggest momentum has been strong rather than fading.
If GE’s run has you watching aerospace more closely, this could be a good moment to scan aerospace and defense stocks for other aviation and defense names catching investor interest.
With GE trading at US$318.50 after a 70.05% 1 year total return and sitting about 11% below the average analyst price target of US$354.82, you have to ask: is there still a buying opportunity here, or is the market already pricing in future growth?
With General Electric closing at US$318.50 and trading on a P/E of 41.7x, the market is assigning a premium earnings multiple compared with peers and fair value estimates.
The P/E ratio compares the share price to earnings per share, so a higher P/E usually reflects stronger growth expectations or a willingness to pay more for each dollar of profit. For GE Aerospace, that means investors are tying the current price closely to its earnings profile and its position across commercial and defense engine markets.
According to the Simply Wall St DCF model, GE at US$318.50 sits above an estimated future cash flow value of US$194.23, so the market price is well ahead of that cash flow based anchor. At the same time, the current P/E of 41.7x is higher than the estimated fair P/E of 37.4x, a level the valuation work suggests the market could move towards if enthusiasm cools or earnings catch up.
Relative to the US Aerospace & Defense industry average P/E of 41.7x and a peer average of 29.8x, GE screens as expensive both against its closest comparables and against that regression based fair ratio benchmark. That combination points to a stock already priced at the upper end of sector expectations, with limited room in the multiple if growth or profitability trends soften.
