◆ What the Market Isn't Pricing In

GE Aerospace (GE) — the variant view

The equipment loss, the fifteen-year calendar and thirty-seven billion dollars of nursing care — none of it in the conversation.

📈 GE valuation, revenue & earnings — P/E, P/S, revenue, EPS →

Three things are sitting in GE Aerospace's filings and are almost never mentioned in the argument about the shares.

Three things sitting in the filings$1.2bnof cumulativeequipment grossloss, 2022-202586%of the servicesbacklog insidefifteen years$36.9bnof long-term-careliabilities$18.7bnof shareholders’equity behind themServices gross margin has risen every year to 45.0%, and the multiple is 37.4x.
The equipment loss, the fifteen-year calendar and the insurance book — none of it in the argument about the shares.

The first is that the company sells engines at a loss and has done for four straight years. Equipment sales against the cost of that equipment: $7,837 million against $8,151 million in 2022 and $9,318 million against $9,900 million in 20231; $10,274 million against $10,341 million in 2024 and $12,159 million against $12,382 million in 20252. Roughly $1.2 billion of cumulative gross loss on the flagship product, against a services gross margin that has risen every year to 45.0%3. Investors who describe this as an aftermarket business are right; investors who model the equipment ramp as revenue growth are missing that it is a cost.

The second is the calendar. The services backlog of $163,029 million at end-2025 — $178,705 million by June 2026 — is disclosed with a run-off schedule: twelve per cent within one year, forty-two within five, sixty-nine within ten, eighty-six within fifteen4. About a seventh of it arrives after 2041. Very few companies in this collection can show a contracted revenue stream reaching that far, and the market discussion of GE Aerospace is almost entirely about the next two quarters of margin.

The third is the one that is genuinely under-priced in both directions: the run-off insurance book. GE Aerospace holds 201,700 long-term-care policies covering 253,000 lives at an average attained age of eighty, sixty-three per cent of them with a lifetime benefit period, against $36,894 million of insurance liabilities and $18,677 million of shareholders' equity5. It is a liability nobody mentions and an option nobody prices: removing it would be the largest single re-rating event available to this company.

What the market is right about is the moat. The barrier here is not capital or engineering but certification and time, and it takes roughly thirty years to get around. What it may be wrong about is the multiple: at 37.4 times trailing earnings6 with management guiding 2026 adjusted earnings per share to $7.65-$7.85 against a trailing $8.497, the shares are priced for the catch-up cycle in shop visits to continue and for the margin to stop falling.

Internal shop visit revenue settles it. Twenty-four per cent in 20258 and thirty per cent in the first half of 20269, against global departures growing three per cent10. When those two converge, this becomes a very wide moat around a three-per-cent-a-year market, and forty times earnings is a different proposition.

References
  1. ReportedEquipment sales against the cost of that equipment: $7,837 million against $8,151 million in 2022 and $9,318 million against $9,900 million in 2023; $10,274 million against $10,341 million in 2024 and $12,159 million against $12,382 million in 2025.
    General Electric Company Form 10-K, FY2024 - statement of earnings (loss) — sales of equipment, sales of services and insurance revenue with their respective costs for 2024, 2023 and 2022, on the continuing-operations basis that excludes GE HealthCare and GE Vernova. — FY2022-FY2024 · publ. February 2025 · source ↗
  2. ReportedEquipment sales against the cost of that equipment: $7,837 million against $8,151 million in 2022 and $9,318 million against $9,900 million in 2023; $10,274 million against $10,341 million in 2024 and $12,159 million against $12,382 million in 2025.
    GE Aerospace Form 10-K, FY2025 - consolidated financial statements — statement of operations including sales of equipment, sales of services, insurance revenue and their respective costs; statement of financial position including insurance liabilities and annuity benefits, shareholders' equity, property plant and equipment and shares outstanding; and the statement of cash flows. — FY2025 · publ. January 2026 · source ↗
  3. Moat Explorer calcRoughly $1.2 billion of cumulative gross loss on the flagship product, against a services gross margin that has risen every year to 45.0%.
    Moat Explorer calculation from GE Aerospace's reported figures. Equipment gross margin: sales of equipment less cost of equipment sold was $(314)M in 2022, $(582)M in 2023, $(67)M in 2024 and $(223)M in 2025, about $1.2 billion cumulatively, and about -1.8% of equipment sales in 2025 against -0.7% in 2024. Services gross margin: (18,345-10,836)/18,345 = 40.9% in 2022, 42.4% in 2023, 43.8% in 2024 and (30,163-16,586)/30,163 = 45.0% in 2025. Services RPO of $163,029M against services revenue of $30,163M is 5.4 years, and $163,029M of $190,564M is 86%. LEAP deliveries of 1,570 + 1,407 + 1,802 + 1,030 in the first half of 2026 total 5,809 since the start of 2023. LEAP was 1,802 of 2,386 commercial engines in 2025, 75.5%. — FY2022-FY2026 · publ. September 2026 · source ↗
  4. ReportedThe services backlog of $163,029 million at end-2025 — $178,705 million by June 2026 — is disclosed with a run-off schedule: twelve per cent within one year, forty-two within five, sixty-nine within ten, eighty-six within fifteen.
    GE Aerospace Form 10-K, FY2025 - notes to the consolidated financial statements — the segment note including segment expenses, segment profit and other segment income; contract assets, contract liabilities and long-term service agreement balances; the remaining performance obligation note with its expected recognition schedule; goodwill and intangible assets; and the geographic revenue table. — FY2025 · publ. January 2026 · source ↗
  5. ReportedGE Aerospace holds 201,700 long-term-care policies covering 253,000 lives at an average attained age of eighty, sixty-three per cent of them with a lifetime benefit period, against $36,894 million of insurance liabilities and $18,677 million of shareholders' equity.
    GE Aerospace Form 10-K, FY2025 - Other Items - Insurance — the run-off insurance operations comprising Employers Reassurance Corporation and Union Fidelity Life Insurance Company, and the long-term care portfolio table giving reserve balances, policies and covered lives in force, average policyholder attained age, the proportions with lifetime benefit periods, inflation protection options and joint lives, policies on claim, and the structured settlement annuity disclosure. — FY2025 · publ. January 2026 · source ↗
  6. ReportedWhat it may be wrong about is the multiple: at 37.4 times trailing earnings with management guiding 2026 adjusted earnings per share to $7.65-$7.85 against a trailing $8.49, the shares are priced for the catch-up cycle in shop visits to continue and for the margin to stop falling.
    GE Aerospace (GE) market data - share price, market capitalisation, trailing and forward price/earnings, trailing revenue, net income and earnings per share, dividend and yield, shares outstanding and the 52-week range. — September 2026 · publ. September 2026 · source ↗
  7. ReportedWhat it may be wrong about is the multiple: at 37.4 times trailing earnings with management guiding 2026 adjusted earnings per share to $7.65-$7.85 against a trailing $8.49, the shares are priced for the catch-up cycle in shop visits to continue and for the margin to stop falling.
    GE Aerospace second-quarter 2026 earnings release (Exhibit 99.1 to Form 8-K of July 16, 2026) — total company GAAP and non-GAAP results, segment revenue, orders and operating profit, free cash flow, the raised full-year 2026 guidance for adjusted revenue growth, operating profit, adjusted earnings per share and free cash flow, the LEAP-1B durability kit certification, the XA102 and GE426 defence programmes, the NASA hybrid-electric ground tests, and the chief executive's commentary. — Q2 2026 · publ. 16 July 2026 · source ↗
  8. ReportedTwenty-four per cent in 2025 and thirty per cent in the first half of 2026, against global departures growing three per cent.
    GE Aerospace Form 10-K, FY2025 - Segment Operations — Commercial Engines & Services: segment revenue, profit and margin, commercial engine and LEAP unit deliveries, internal shop visit revenue growth, the CES remaining performance obligation, the 2025 engine commitments from Qatar Airways, Emirates, International Airlines Group, ANA Holdings, Malaysia Aviation Group, Korean Air, Cathay Pacific and Pegasus, and commercial departures growth. — FY2025 · publ. January 2026 · source ↗
  9. ReportedTwenty-four per cent in 2025 and thirty per cent in the first half of 2026, against global departures growing three per cent.
    GE Aerospace Form 10-Q for the quarter ended June 30, 2026, Management's Discussion and Analysis — consolidated revenue, profit and earnings per share, the segment results for Commercial Engines & Services and Defense & Propulsion Technologies, commercial engine and LEAP unit deliveries, internal shop visit revenue growth, the remaining performance obligation and its equipment and services split, the supply chain, tariff and Middle East discussions, and the planned $1 billion US manufacturing investment and 5,000 US hires. — Q2 2026 · publ. July 2026 · source ↗
  10. ReportedTwenty-four per cent in 2025 and thirty per cent in the first half of 2026, against global departures growing three per cent.
    GE Aerospace Form 10-K, FY2025 - Segment Operations — Commercial Engines & Services: segment revenue, profit and margin, commercial engine and LEAP unit deliveries, internal shop visit revenue growth, the CES remaining performance obligation, the 2025 engine commitments from Qatar Airways, Emirates, International Airlines Group, ANA Holdings, Malaysia Aviation Group, Korean Air, Cathay Pacific and Pegasus, and commercial departures growth. — FY2025 · publ. January 2026 · source ↗
Sources
Generated September 23, 2026