GE Aerospace (GE) Stock Falls as $11.75 Billion Casting Bet Raises Eyebrows

TLDR

• GE Aerospace is acquiring Consolidated Precision Products (CPP) for $11.75 billion in its first major deal since the GE breakup.
• The deal values CPP at roughly 26 times estimated 2027 Ebitda before synergies, or 18 times with expected cost savings.
• GE Aerospace plans to fund the acquisition with cash and debt, and expects it to add to EPS in year one.
• The announcement comes after Elon Musk flagged turbine blade casting as a bottleneck for AI-driven power demand.
• GE stock was down 0.6% in premarket trading after the deal was announced.

GE Aerospace (NYSE: GE) stock slipped 0.6% in premarket trading on Tuesday after the company announced it would acquire casting specialist Consolidated Precision Products for $11.75 billion.

GE Aerospace, GE

The deal is the first major acquisition for GE Aerospace since CEO Larry Culp split the old General Electric into three separate companies: GE HealthCare Technologies, GE Vernova, and GE Aerospace.

GE Aerospace plans to pay using a mix of cash and debt. The company expects the transaction to be accretive to earnings per share in its first full year.

The price tag values CPP at about 26 times estimated 2027 Ebitda before synergies. Factor in expected cost reductions and that multiple drops to around 18 times. For context, Howmet Aerospace, which also operates casting capacity, trades at roughly 28 times estimated 2027 Ebitda.

The timing is hard to ignore. Elon Musk recently suggested that SpaceX would invest in turbine blade manufacturing to help solve what he sees as a key bottleneck to AI expansion. The logic: AI data centers need power, power generation needs turbines, and turbines need precision-cast blades.

Musk’s comments sparked a debate about whether casting companies now face a new competitor in SpaceX, or whether the commentary simply confirms that casting capacity will be in high demand for years.

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GE Bets on the Demand Side

GE Aerospace’s move suggests it believes demand will outpace supply. CPP makes blades for both jet engines and power turbines. GE Aerospace is focused on the jet engine side, covering both commercial and military applications, but the underlying casting technology crosses over.

This is a form of vertical integration, though not a traditional one. CPP currently sells to third-party customers, and GE Aerospace says it will continue to do so. The company’s goal is to increase overall output, not restrict supply to competitors.

Coming into Tuesday, GE Aerospace stock had gained 9% year to date and was up 21% over the past 12 months. The stock opened at $336.66, with a 52-week range of $268.91 to $388.84. The company carries a market cap of around $349 billion and a P/E ratio of 39.65.

Wall Street Still Broadly Bullish

Analyst sentiment remains positive. Of 19 analysts tracked, 16 have a Buy rating, two a Hold, and one a Sell. The consensus price target sits at $390.59.

Recent upgrades include Citigroup setting a $431 target and JPMorgan raising its objective to $400 with an Overweight rating. Goldman Sachs reaffirmed its Buy with a $410 price target. Royal Bank of Canada bumped its target to $400 from $355.

On the earnings front, GE Aerospace posted $2.02 EPS for Q2, beating the $1.86 consensus estimate. Revenue came in at $12.63 billion, topping expectations of $11.87 billion and up 21.1% year over year.

The company set full-year 2026 guidance at $7.65 to $7.85 EPS, and analysts on average are projecting $7.91 for the year.

Institutional investors hold 74.77% of GE Aerospace stock. SVP Mohamed Ali sold 8,096 shares at $353.71 on July 24th, reducing his direct stake by 28.15%.