← GE forward model

GE · Forward model · Commercial Engines & Services · Bull case

What has to happen in Commercial Engines & Services

Model as of

This page changes Commercial Engines & Services inside the complete GE model. Every other vertical, corporate programme and valuation assumption stays in the selected portfolio case.

GE forward model
Horizon
Consolidated fair value $394.49 all other verticals held in this portfolio case
Final-quarter revenue $16.99B 77% of company revenue
Explicit segment contribution $60.28B EBITDA less segment capex, before corporate items

The guided second-half deceleration does not happen. GE guided low double digits for 2026 as recently as January and delivered 27% adjusted revenue growth in the first half; it beat the Street's adjusted revenue by 6.5% and adjusted EPS by 8.6% in the very quarter it raised guidance. First-half CES services revenue grew 32%, and the LEAP-1B durability kit is certified with roughly double the time-on-wing and full cutover from the beginning of 2027, which raises the value of each shop visit and lengthens the annuity behind it. Add 1.2 points a quarter of growth and 1.2 points of margin, exit at 25x, and fair value is $394.49 - 17.5% above the traded price. What this case does NOT reach is the tape's implied 28.0x exit on the base path: even here the multiple has to stay a full turn above the aerospace peer band.

Commercial Engines & Services

Basis quarter$9.73B
Final quarter$16.99B
Implied CAGR+12%
Final revenue mix77%

Engines are sold thin and maintained fat. CES puts LEAP, GEnx, GE9X and CF6 engines on aircraft and then earns decades of shop visits and spare parts on an installed base of roughly 50,000 commercial engines. Services were $7,434m of the $9,731m segment total in the basis quarter and grew 26%, while equipment grew 30% on much lower margin - so the segment's margin moves with the equipment-to-services mix, not with demand.

Last four quarters
2026 Q1 $8.92B Reported
2026 Q2 $9.73B Reported
Internal shop visit revenueSpare partsLong-term service agreementsNew and spare engine deliveries (LEAP, GEnx, GE9X, CF6)
Sequential growth +2.0%/qtr decaying toward +1.3% Solves GE's guided 2026 CES revenue of ~+20% and the high-teens adjusted revenue guide.
Commercial Engines & Services

Latest: $16.99B (2031Q2E)

Period Value
2026Q1 $8.92B
2026Q2 $9.73B
2026Q3E $10.04B
2026Q4E $10.36B
2027Q1E $10.68B
2027Q2E $11.01B
2027Q3E $11.33B
2027Q4E $11.67B
2028Q1E $12.00B
2028Q2E $12.35B
2028Q3E $12.69B
2028Q4E $13.05B
2029Q1E $13.41B
2029Q2E $13.78B
2029Q3E $14.15B
2029Q4E $14.53B
2030Q1E $14.92B
2030Q2E $15.32B
2030Q3E $15.72B
2030Q4E $16.14B
2031Q1E $16.56B
2031Q2E $16.99B

Assumptions & reasoning

  • EBITDA margin is GE's own guided full-year 2026 CES operating margin of about 26.6% ($10.30bn midpoint on model revenue of $38.7bn; first-half actual 26.9%) plus about 2.6% of revenue for depreciation and amortisation, derived from first-half company D&A of $625m ($452m of PP&E depreciation plus $173m of intangible amortisation). It is deliberately NOT the single 27.3% second-quarter print, which was above the guided year.
  • History is two quarters, and that is a disclosure limit rather than a shortcut. Effective 2026 GE moved its Aeroderivative business from CES to DPT and recast only the quarters it has since restated: the 2025 Q2 release printed CES at $7,990m, the 2026 Q2 release prints the same quarter at $7,646m. Recast 2025 Q3 and 2025 Q4 do not exist in any filing, so the series starts where the current definition starts.
  • Margin fell 160 basis points year on year even in a 27% growth quarter, because install engine growth including GE9X is dilutive. A good quarter for volume is a bad quarter for mix, which is why the terminal margin only recovers to 30.8%.
GE model map

Explore another vertical