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GE · Forward model · Eliminations & Other · Bull case

What has to happen in Eliminations & Other

Model as of

This page changes Eliminations & Other 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 −$917M -4% of company revenue
Explicit segment contribution −$3.97B 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.

Eliminations & Other

Basis quarter−$540M
Final quarter−$917M
Final revenue mix-4%

The negative reconciling line between segment revenue and consolidated revenue: intersegment sales, principally engines and parts moving between CES and DPT, plus items GE does not attribute to a segment. It exists so the four verticals sum exactly to GAAP total revenue, and it scales with intersegment volume, so it deepens as the segments grow.

Last four quarters
2026 Q1 −$520M Estimated
2026 Q2 −$540M Reported
Intersegment revenue eliminationsOther non-segment items
Sequential growth +1.8%/qtr decaying toward +1.2% Tracks segment volume; eliminations deepened 14% year on year in the basis quarter.
Eliminations & Other

Latest: −$917M (2031Q2E)

Period Value
2026Q1 −$520M
2026Q2 −$540M
2026Q3E −$556M
2026Q4E −$573M
2027Q1E −$589M
2027Q2E −$606M
2027Q3E −$623M
2027Q4E −$641M
2028Q1E −$658M
2028Q2E −$676M
2028Q3E −$694M
2028Q4E −$712M
2029Q1E −$731M
2029Q2E −$750M
2029Q3E −$770M
2029Q4E −$789M
2030Q1E −$810M
2030Q2E −$830M
2030Q3E −$851M
2030Q4E −$872M
2031Q1E −$894M
2031Q2E −$917M

Assumptions & reasoning

  • The 33.0% EBITDA margin is the disclosed ratio of eliminations profit to eliminations revenue: $(178)m over $(540)m in the basis quarter. Both are negative, so the product is a negative EBITDA of $(178)m - exactly the eliminations cost GE reports. It is not an operating margin and should not be read as one.
  • 2026 Q1 is the only estimated point in this model. GE prints Eliminations & Other of $(519)m for that quarter, which makes its own segment subtotal foot to $11,615m against the $11,614m adjusted revenue it prints one page later. The model uses $(520)m, the residual of the disclosed $12,392m GAAP total less CES $8,920m, DPT $3,214m and Insurance $778m, so the four lines reconcile exactly. The $1m difference is rounding in GE's table.
  • Capex is exactly zero, because a reconciliation buys nothing. Everything the company spends sits in the CES and DPT capex intensities.
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