GE Aerospace Q1 Preview: Trade War To Overshadow Strong Backlog? Retail’s Bearish

GE Aerospace (GE) stock has gained 1.6% over the past week ahead of the company’s first-quarter earnings report on Tuesday.

According to FinChat data, Wall Street expects it to post earnings of $1.26 per share on revenue of $9.06 billion for the quarter ended March 31. The aerospace firm has topped estimates in the previous four quarters.

Demand for airplane engines remains robust amid aircraft shortages. GE Aerospace, which emerged from a three-way split of General Electric, has previously said its commercial airplane engine backlog runs through the rest of the decade.

Aftermarket demand, which includes maintenance, repair, and overhaul, also continues to trend higher as a shortage of new aircraft forces airlines to invest in their existing ones.

However, Wells Fargo analysts noted last week that a global economic slowdown would hit both original equipment makers and the aftermarket.

According to TheFly, the brokerage estimated a modest economic slowdown could cut aircraft demand by 300 basis points, which translates to a 6% and 10% impact on aftermarket and original equipment sales, respectively.

While Citi analysts believed that aerospace stocks such as GE have less exposure to tariffs due to an increase in defense spending.

According to TheFly, Citi analysts noted that suppliers could face some margin pressure, and business jet manufacturers are likely to experience near-term cost pressure due to their dependency on imports from Canada and Mexico amid the tariffs.

Retail sentiment on Stocktwits was in the ‘bearish’ (26/100) territory, with a lower score than a week ago, while retail chatter remained ‘low.’

One trader noted that the tariff war brings uncertainty, especially in segments exposed to China.

GE Aerospace shares have gained 8.3% year-to-date (YTD).

Also See: Lockheed Martin Q1 Preview: International Sales In Focus Amid Tariff Fallout, Retail’s Split

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