While the commercial aerospace market has remained the major driver for GE Aerospace GE, the defense side of the industry has also been witnessing positive momentum. Robust orders for GE’s propulsion & additive technologies, engines and critical aircraft systems in the defense sector are driving the Defense & Propulsion Technologies segment’s results.
The company’s multi-year partnership with Palantir Technologies Inc. PLTR (entered in March 2026) will focus on improving the fleet management and operational readiness of the U.S. Air Force’s military aircraft. As part of the program, GE will work on improving the readiness of its J85 engine that powers the U.S. Air Force’s T-38 training aircraft. Also, GE’s deal with the Naval Air Systems Command to supply T408 engines for the U.S. Marine Corps’ heavy-lift helicopter holds promise.
Apart from this, in 2025, the company received an Indefinite Delivery Indefinite Quantity (IDIQ) contract from the U.S. Army to supply F110 engines for F-15 and F-16 jets used by allied countries. As part of a Foreign Military Sales (FMS) program, the company also secured a $5 billion contract from the U.S. Air Force to supply F110 engines, parts and support services.
GE’s strong pipeline of projects supported its full-year 2025 results as the Defense & Propulsion Technologies segment’s orders surged 19% and revenues increased 11% to $10.6 billion. The segment’s operating profit grew 22% to $1.3 billion and margins expanded 110 basis points to 12.3%. The segment recorded a robust backlog of $21 billion in 2025, reflecting an increase of about $3 billion from the previous year.
Robust budgetary provisions for the defense sector set the stage for GE Aerospace, which remains focused on winning more defense contracts, which is likely to boost its top line.
GE's Peers in the Defense Market
Among its major peers, Textron Inc. TXT enjoys solid demand for its defense products as well. In the fourth quarter of 2025, Textron signed a contract to deliver the first two Beechcraft T-6 to Japan's Air Self-Defense Force. In the quarter, revenues from Textron’s Bell segment amounted to $1.3 billion, up 11% year over year due to higher volume on the U.S. Army's MV-75 program.
Its another peer, RTX Corporation RTX, is witnessing solid bookings and backlog levels. RTX’s management continues to expect both domestic and international program growth to remain robust for its defense business in the upcoming quarters. RTX’s strong backlog supports a positive outlook for revenue growth in its defense business, which is expected to strengthen profits over the long term.
GE's Price Performance, Valuation and Estimates
Shares of GE Aerospace have gained 72.3% in the past year compared with the industry’s growth of 30.2%.
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From a valuation standpoint, GE is trading at a forward price-to-earnings ratio of 40.32X, above the industry’s average of 32.36X. GE Aerospace carries a Value Score of D.
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The Zacks Consensus Estimate for GE’s 2026 and 2027 earnings has been stable over the past 30 days.
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The company currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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