Is GE Aerospace Stock Going to $201? 1 Wall Street Analyst Thinks So.

UBS recently raised its price target on GE Aerospace (NYSE: GE) stock from $191 to $201 while maintaining a buy rating on the stock. According to thefly.com, the UBS analyst's argument is based on GE Aerospace's strong position in the airplane engine aftermarket. Bullishness comes from a combination of growing flight departures and GE's dominant position in commercial aircraft engines. Its joint venture, CFM International, has LEAP engines on both the A320 neo family and the Boeing 737 MAX, as well as CFM56 engines on the legacy Airbus A320 family and Boeing 737 airplanes.

Aircraft engines can be used for over 40 years, and tend to generate decades of lucrative aftermarket revenue as they come in for periodic "shop visits" and are maintained and overhauled. While aircraft engines are typically sold at a loss, the real money is made in the long-term stream of aftermarket revenue. As such, the newer LEAP engines have many years of earnings and cash flow ahead.

While shop visits for the legacy CFM56 engines are set to peak in 2025 they will still provide a long tail of aftermarket revenue ahead -- 45% of GE's fleet hadn't had its first shop visit at the end of 2023.

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Source Fool.com