Analyst Note| Joshua Aguilar |
Narrow-moat-rated General Electric produced a mixed third-quarter print, with a little bit of fuel for both the bulls and bears. Nevertheless, we see no reason to alter our $122 fair value estimate, at this juncture. The positive in the report was no doubt the resounding uproar in terms of the commercial aerospace recovery, which is clearly underway at General Electric. On this front, we were pleased, as both commercial engines and services grew at GE. This matters because in prior quarters, GE only managed to grow the service revenue component in commercial aero, so our concern was that margins would revert lower once GE managed to fill engine orders and subsequently book the associated revenue (engines are a loss leader for this business).