GE: GE Aerospace Exhibits Continued Strength as Vernova Spinoff Is Imminent
GE Aerospace held its investor day on March 7. Following our review of the materials and the presentation, we’re not materially altering our forecast, though we are front-end loading the timing of cash flows. These small changes, coupled with the time value of money since our last forecast, positively impact our valuation by $1 each. Consequently, our fair value estimate rises to $156 from $154 previously. Embedded in our DCF valuation is our conviction that GE Aerospace will be worth nearly $140 billion, while GE Vernova will be worth nearly $35 billion on an equity value basis. We point out that GE Vernova’s balance sheet will be in a net cash position (meaning Vernova will receive a cash contribution from GE but no debt).