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The analysts told investors that FY25 is a much better reflection of GE’s normal earnings power, and this year is now the basis of its valuation framework.
“We have refreshed our Commercial OEM delivery forecasts and fortified our EBIT bridge to reflect slightly heavier adverse mix (OEM vs. AM outgrowth), albeit with narrowing LEAP program losses,” they wrote.
“The net result is an unchanged 2023e EBIT of $5.7bn (at high end of guidance range), but we have increased our 2025e EBIT by ~3% to $7.8bn (at midpoint of range). We expect management to slightly over-deliver vs. 20% margin bogey over that timeframe,” they added.
The analysts also stated that “Vernova could be a much more valuable equity,” but they need more confidence in the path to wind profitability over this time.
