DCF Studio

    GE · NYQ · Industrials

    GE Aerospace

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 95.42

    Market price

    USD 315.78

    Implied upside

    -69.8%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2025-12-31

    Current EV/EBITDA of 33.9x sits outside a defensible 3-20x band, so the exit multiple is capped at 20.0x. A multiple that far out usually means EBITDA is the wrong denominator for this business.

    Value Per Share

    Perpetuity growth
    USD 95.42-69.8%
    Exit multiple
    USD 173.11-45.2%
    Market price
    USD 315.78

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn5bn10bnFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35CAGR
    RevenueUSD 50.9bnUSD 56.8bnUSD 62.8bnUSD 68.7bnUSD 74.4bnUSD 79.7bnUSD 84.4bnUSD 88.4bnUSD 91.7bnUSD 94.0bn+7.1%
    EBITUSD 7.9bnUSD 8.8bnUSD 9.8bnUSD 10.7bnUSD 11.5bnUSD 12.4bnUSD 13.1bnUSD 13.7bnUSD 14.2bnUSD 14.6bn+7.1%
    NOPATUSD 7.0bnUSD 7.8bnUSD 8.6bnUSD 9.4bnUSD 10.2bnUSD 10.9bnUSD 11.5bnUSD 12.1bnUSD 12.5bnUSD 12.9bn+7.1%
    Add depreciation & amortisationUSD 1.7bnUSD 1.9bnUSD 2.1bnUSD 2.3bnUSD 2.4bnUSD 2.6bnUSD 2.8bnUSD 2.9bnUSD 3.0bnUSD 3.1bn+7.1%
    Less capital expenditureUSD -1.3bnUSD -1.6bnUSD -2.0bnUSD -2.4bnUSD -2.8bnUSD -3.3bnUSD -3.7bnUSD -4.2bnUSD -4.6bnUSD -5.0bn+16.2%
    Capex, % of revenue2.5%2.8%3.2%3.5%3.8%4.1%4.4%4.7%5.0%5.3%-
    Less increase in working capitalUSD -1.7bnUSD -2.0bnUSD -2.0bnUSD -2.0bnUSD -1.9bnUSD -1.7bnUSD -1.6bnUSD -1.3bnUSD -1.1bnUSD -757.5m-8.4%
    Free cashflow to firmUSD 5.7bnUSD 6.1bnUSD 6.7bnUSD 7.3bnUSD 7.9bnUSD 8.5bnUSD 9.0bnUSD 9.5bnUSD 9.9bnUSD 10.2bn+6.7%
    Discount factor0.95370.86730.78880.71740.65250.59340.53970.49090.44640.4060-
    Present valueUSD 5.4bnUSD 5.3bnUSD 5.3bnUSD 5.3bnUSD 5.2bnUSD 5.1bnUSD 4.9bnUSD 4.7bnUSD 4.4bnUSD 4.1bn-
    Present Value Of The ForecastUSD 49.5bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.89%US 10-year Treasury (^TNX), 2026-11-02
    Equity risk premium4.23%Damodaran, January 2026
    Beta1.274Reported 1.409, pulled toward 1.0 (Blume)
    Cost of equity10.28%Risk-free + beta x equity risk premium
    Cost of debt5.29%Risk-free + 40bp, the spread for a AAA rating at 10.3x interest cover. Book interest / average debt was lower, at 4.2%.
    Market capitalisationUSD 327.6bn94.1% of capital
    Total debtUSD 20.5bn5.9% of capital, book value as a proxy
    Tax rate11.9%Effective, capped at statutory
    WACC9.95%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 95.42

    55% of EV

    Forecast FCFF, final year
    USD 10.2bn
    Capex at depreciation, working capital in reinvestment
    USD 13.7bn
    Less reinvestment at g/ROIC (20.7% of NOPAT)
    USD -2.8bn
    Capitalised
    USD 10.8bn
    ROIC (reported)
    12.1%
    Terminal value, undiscounted
    USD 149.0bn
    Terminal value, discounted
    USD 60.5bn
    Enterprise value
    USD 110.0bn
    Less net debt
    USD 8.1bn
    Equity value
    USD 101.9bn

    Exit at 20.0x EBITDA

    Value per shareUSD 173.11

    74% of EV

    Terminal value, undiscounted
    USD 353.3bn
    Terminal value, discounted
    USD 143.5bn
    Enterprise value
    USD 193.0bn
    Less net debt
    USD 8.1bn
    Equity value
    USD 184.9bn

    Spread between methods: 58%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    7.95%131.10132.92135.27138.33142.34
    8.95%111.08111.53112.22113.21114.57
    9.95%95.8995.6195.4295.3695.45
    10.95%83.9983.3182.6682.0581.48
    11.95%74.4373.5472.6471.7470.85

    Outlined: this model. Green text: above today's price of 315.78. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputActualModelImplied
    Revenue growth, a year16.3%7.4%23.7%
    EBIT margin18.9%15.5%47.7%
    Discount rate-10.0%5.0%
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.