Buffett Brain · Research note
Score updated 29 Oct 2026 · analysis from 1 Jun 2026
GE· Industrials
GE Aerospace
GE Aerospace makes wonderful jet engines, but at 38 times earnings the price asks you to forget what you are paying for.
Buffett fit
Partial fit
Owner
35
Durability
25
Management
70
Price
3
Score updated 29 Oct 2026 · analysis from 1 Jun 2026
Buffett's checklist
Each number against Buffett's bar, and where it ranks among Industrials stocks in our database.
How much profit the business makes on each dollar invested in it. Higher is better.
What is left of each sale after the cost of making the product. A high number often means pricing power.
The cash the business earns for its owners, compared with the price of the whole company.
How fast sales grew each year over the last five years.
How many years of today's profit you pay for at today's price. Lower means cheaper.
How much the company owes compared with what it owns outright. Lower is safer.
The four pillars
How the business measures up on each of Buffett's four tests.
If I owned the whole company at this price I would be handing over more than 38 dollars for every dollar of current earnings, and the business would be paying me back an owner-earnings yield of just 2.2 percent.
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The engine franchise itself is durable, since airlines stay with an engine for the life of the airframe and pay for parts and overhauls for decades.
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Management earns the highest mark here, a 70, and it is deserved. They simplified a sprawling conglomerate into a focused aerospace company, the share count is gently shrinking at about 0.7 percent a year, and covers 83 percent of reported net income, which means the earnings are largely real cash.
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There is no here, and that is the whole story. A 2.2 percent owner-earnings yield and a of 38.4 mean you are paying a premium price for a business whose revenue is shrinking and whose returns on capital are slipping.
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- The full reasoning behind all four pillars
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For and against
The strongest points on each side, with the numbers behind them.
In its favor
6- 1 of 18.5 percent shows the engine and aftermarket franchise is genuinely profitable.
- 2 covers 83 percent of net income, so reported earnings are backed by real cash.
- 3Interest coverage above 10 times and net debt at only 0.8 times EBITDA make the balance sheet sturdy.
- 4Management scores 70 for breaking up the conglomerate and shrinking the share count by about 0.7 percent a year.
Concerns
6- 1Valuation is the disqualifier: a of 38.4 and an owner-earnings yield of just 2.2 percent leave no (valuation score 3 of 100).
- 2Revenue is shrinking at about 5 percent a year, a poor backdrop for a stock priced for growth.
- 3 fell to 8.5 percent trailing from a five-year 10.1 percent, so returns are trending down.
- 4Earnings have shown a peak-to-trough decline of 28 percent, a reminder of how cyclical aviation remains.
Price history
$301+361.4%· 5-year return
Weekly closing prices. Touch or hover the line for a date.
The business
How the business works
GE Aerospace designs, builds, and services commercial and military jet engines, and the real money is in the long tail of service contracts that follow every engine sold. of 18.5 percent and near 34.8 percent show this is a profitable franchise once an engine is on a wing. The trouble is that reported revenue has actually shrunk at about 5 percent a year, which tells you the post-spinoff company is still settling into its true size.
How this analysis has moved
The call has held across 6 reviews.
Sep 27, 2026 → Oct 29, 2026
What other investors would say
The same company, judged by three other documented playbooks.
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