General Electric Co. (GE.US) surpasses Q2 earnings expectations, Goldman Sachs Group, Inc. reveals three major advantages and risks such as supply chain disruptions

As a leading company in the global aviation engine field, General Electric Aviation (GE.US) recently released its latest financial results, with GE Aviation's second-quarter revenue reaching $10.2 billion, a year-on-year increase of 24.1%. Goldman Sachs Group, Inc. has given a "buy" rating to its performance from 2025 to 2028 in its research report, maintaining a 12-month target price of $257. Financial performance exceeds expectations, 2025 targets comprehensively revised According to Goldman Sachs Group, Inc. analysis, General Electric Aviation delivered outstanding results in the second quarter of 2025: revenue, profit margin, Earnings Before Interest and Taxes (EBIT), earnings per share, and free cash flow all exceeded FactSet consensus expectations. Specifically, the company revised its 2025 adjusted revenue growth expectations to 15%, up from the previous low two-digit percentage (LDD%) and exceeding the market consensus of 16.5% implied growth. Operating profit range was raised to $8.2-$8.5 billion, further narrowing from the previous $7.8-$8.2 billion guidance, and covering the market forecast of $8.4 billion. Earnings per share (EPS) were adjusted to $5.60-$5.80, up from $5.10-$5.45, also higher than the market consensus of $5.62. Free cash flow (FCF) was revised to $6.5-$6.9 billion, up from $6.3-$6.8 billion, covering the market forecast of $6.7 billion. 2028 long-term targets demonstrate technological barrier advantages Goldman Sachs Group, Inc. is particularly focused on General Electric Aviation's strategic plan for 2028. The company expects a Compound Annual Growth Rate (CAGR) of high single digits (HSD%) for revenue from 2025 to 2028, significantly higher than previous expectations. The operating profit target is approximately $11.5 billion, up 15% from the previous forecast of around $10 billion; the earnings per share target is $8.40, and the free cash flow target is $8.5 billion, all reflecting the profitability improvement achieved through product iteration and cost optimization. Dual-engine drives business growth, technological iteration consolidates market position Goldman Sachs Group, Inc. points out that the growth momentum of General Electric Aviation mainly comes from two core businesses: Commercial Engine Services (CES) and Defense Propulsion Technology (DPT). In the second quarter of 2025, CES department revenue increased by about 30% year-on-year, benefiting from spare parts sales growth, increased revenue from internal maintenance visits, and price optimization and unit volume growth. The DPT department achieved approximately 7% revenue growth, as price increases and volume improvements effectively offset the soft services demand and unfavorable engine mix. It is worth noting that the EBIT profit margin of the CES department exceeded expectations, demonstrating the synergistic effects of its service network and digital solutions; the profit margin of the DPT department also surpassed expectations, confirming its leading position in defense technology. Goldman Sachs Group, Inc. rating logic: technological barriers and cash flow advantage support valuation Based on financial data and business performance, Goldman Sachs Group, Inc. maintains a "buy" rating and emphasizes three core logics: firstly, General Electric Aviation's technological barriers and market share in the aviation engine field are difficult to replicate; secondly, profit expectations for 2025-2028 have been revised upward, showing management's ability to exceed expectations; thirdly, the free cash flow target has been raised from $6.3-$6.8 billion to $6.5-$6.9 billion, providing ample room for capital returns and research and development investments. Risk warning: supply chain disruptions and demand fluctuations need continuous attention Despite the optimistic outlook, Goldman Sachs Group, Inc. cautions investors to watch out for three potential risks: global supply chain interruptions that may affect production and delivery schedules; declining air travel demand or impact on commercial engine services business; adjustments to defense budget priorities that may affect DPT department orders. Goldman Sachs Group, Inc. recommends continuous monitoring of General Electric Aviation's progress in building supply chain resilience and customer diversification. In conclusion, Goldman Sachs Group, Inc. believes that General Electric Aviation has built the ability to grow through technological iteration and business optimization across cycles. Its 2025 financial performance exceeding expectations and the upward revision of its 2028 targets further validate the strategic value of the leading aviation engine in the industry upgrade.