GE Aerospace (GE) shares edged higher on Monday as investors reacted to former President Donald Trump's recent remarks suggesting a significant aircraft deal with China. However, the lack of confirmed details has tempered enthusiasm, keeping the market cautious.
Trump's Comments Spark Interest
Trump stated on Friday that China had agreed to purchase approximately 200 Boeing jets, potentially expanding to 750 aircraft, all powered by GE Aerospace engines. This would mark the first major Chinese order for Boeing in nearly a decade. However, Boeing characterized the 200-jet figure as an "initial commitment," a term used for early agreements not yet included in its official backlog. Chinese officials have offered no confirmation, and the country's aviation regulator merely acknowledged meetings with GE and Boeing executives in Beijing.
Market Reaction
GE shares rose 0.7% to $283.56 by midday Monday, recovering slightly after four consecutive days of decline. The stock remains below its February peak. In contrast, Boeing shares fell 1.5%, reflecting ongoing uncertainty. Other aerospace companies like RTX and Honeywell also traded higher, suggesting a sector-wide response to the potential deal.
Details Remain Vague
The lack of specifics is a key concern for investors. Trump claimed China would buy 400 to 450 GE Aerospace engines but provided no timeline or model details. Reuters reported that GE CEO Larry Culp and Boeing CEO Kelly Ortberg met with Chinese state planners, but official Chinese statements made no reference to any aircraft deal. Cameron Johnson, a senior partner at Tidalwave Solutions in Shanghai, called the absence of timing details "surprising."
Potential Impact on GE
If finalized, the deal could be a major catalyst for GE Aerospace. As Boeing's primary engine supplier, GE would benefit from initial engine sales and, more importantly, long-term parts and maintenance contracts, which offer higher margins. However, analysts caution that the order could remain a political promise rather than a real purchase. Independent expert Li Hanming noted that after-sales support and potential U.S. export restrictions could influence what China ultimately buys.
Other Factors at Play
Beyond the China news, GE is also in focus due to recent financial disclosures from Trump and institutional filing stories. Quiver Quantitative highlighted increased online chatter about GE following a portfolio disclosure, linking it to aerospace, energy, and small modular reactors. However, the firm noted that its analysis was based on AI review of user posts, not official filings.
Institutional activity also garnered attention. Dougherty & Associates acquired 8,097 GE shares in the fourth quarter, valued at roughly $2.49 million. Overall, institutions hold 74.77% of GE shares, with a consensus "Moderate Buy" rating and an average price target of $348.22, according to MarketBeat. However, BNP Paribas Exane is less optimistic, lowering its target to $270 with an underperform rating.
GE's Recent Performance
GE posted strong first-quarter results on April 21, with total orders surging 87% to $23.0 billion. GAAP revenue rose 25% to $12.4 billion, while adjusted EPS climbed 25% to $1.86. CEO Larry Culp highlighted double-digit growth in both earnings and free cash flow, supported by higher orders and revenue.
Outlook
While the China deal remains uncertain, it introduces a new catalyst for GE. The company faces a mixed landscape, with Boeing waiting for China to reopen its market, as Airbus continues to gain ground. For GE, the key will be converting any aircraft orders into concrete engine contracts and long-term service revenue. Investors will be watching for more definitive signals from both Beijing and Boeing.
