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GE · Forward model · Defense & Propulsion Technologies · Bull case

What has to happen in Defense & Propulsion Technologies

Model as of

This page changes Defense & Propulsion Technologies 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 $5.50B 25% of company revenue
Explicit segment contribution $9.48B 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.

Defense & Propulsion Technologies

Basis quarter$3.44B
Final quarter$5.50B
Implied CAGR+10%
Final revenue mix25%

Military propulsion and Avio Aero: F110, F404, F414, T700 and T901 engines, next-generation adaptive-cycle programmes such as the XA102 and GE426, and the Aeroderivative business moved in from CES for 2026. Contract-priced and budget-paced rather than fleet-paced, it runs at roughly half the CES operating margin and grew 16% in the basis quarter against CES's 27%.

Last four quarters
2026 Q1 $3.21B Reported
2026 Q2 $3.44B Reported
Defense & Systems equipment and servicesPropulsion & Additive Technologies (including Avio Aero)Aeroderivative (moved from CES effective 2026)
Sequential growth +1.4%/qtr decaying toward +1.0% Lands 2026 DPT revenue where GE's low-double-digit growth guide puts it.
Defense & Propulsion Technologies

Latest: $5.50B (2031Q2E)

Period Value
2026Q1 $3.21B
2026Q2 $3.44B
2026Q3E $3.53B
2026Q4E $3.62B
2027Q1E $3.72B
2027Q2E $3.81B
2027Q3E $3.90B
2027Q4E $4.00B
2028Q1E $4.09B
2028Q2E $4.19B
2028Q3E $4.29B
2028Q4E $4.39B
2029Q1E $4.49B
2029Q2E $4.59B
2029Q3E $4.70B
2029Q4E $4.81B
2030Q1E $4.92B
2030Q2E $5.03B
2030Q3E $5.14B
2030Q4E $5.26B
2031Q1E $5.38B
2031Q2E $5.50B

Assumptions & reasoning

  • EBITDA margin is GE's guided full-year 2026 DPT operating profit of $1.65bn midpoint on model revenue of $13.7bn - about 12.1%, against a first-half actual of 12.8% - plus about 1.5% of revenue for depreciation and amortisation. The guided year is below the 13.8% second-quarter print because the fourth quarter has been the weak one: DPT margin was 8.9% in 2025 Q4 against 13.6% in 2025 Q3.
  • Propulsion & Additive Technologies revenue rose 23% in the basis quarter on Avio Aero while Defense & Systems rose 12%, so the growth is in the smaller half of the segment and it is the half GE has just enlarged.
  • Same two-quarter history limit as CES and for the same reason: the Aeroderivative transfer redefined this segment for 2026 and GE has never recast 2025 Q3 or Q4. The recast lifted 2025 Q2 DPT from $2,563m to $2,978m, a 16% difference, so splicing the old series in would be a basis error.
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