Research · Sep 3, 2026
[GE] GE Aerospace Thesis 2026: LEAP Services Engine Powers Multi-Year Earnings Compounding
GE Aerospace FY2025 revenue ~$40B (+9-12% YoY) with adj. operating margin expanding to 22% — second full year as focused commercial + military aircraft engine company post April 2024 GE Vernova spinoff. Services revenue ~$30B (~75% of total) at ~32% operating margin vs equipment ~12-14% — services contributes ~80%+ of operating income on 75% of revenue. LEAP engine installed base reached ~9,000+ engines (cumulative deliveries ~9,150) with FY2025 production constrained at ~1,450 engines (vs FY2023 plan ~2,000) on Boeing 737 MAX post-Alaska Airlines crisis + supply chain bottlenecks. FY2026 thesis: LEAP production recovery toward 1,800-2,000 engines as Boeing 737 MAX rate returns to 38-42/month + Airbus A320neo continues; LEAP installed base maturing into first overhaul interval (peak service revenue era beginning FY2026-2028); defense propulsion captures elevated military procurement; key risks: sustained Boeing supply chain issues, commercial aviation demand reset, Pratt & Whitney GTF capturing A320neo share.