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GE · Forward model · Defense & Propulsion Technologies · Culp 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 $481.20 all other verticals held in this portfolio case
Final-quarter revenue $6.19B 25% of company revenue
Explicit segment contribution $10.56B EBITDA less segment capex, before corporate items

Culp's own framing, taken literally: the constraint is material input, not demand, and the job is converting a backlog of more than $210 billion. Supplier material input rose double digits both sequentially and year on year, orders were $16.5 billion in the quarter, and the contracted services backlog alone is $178,705m with only 12% of it due inside a year. If supply keeps loosening at this pace the backlog converts faster than any guided growth rate implies. At 1.8 points a quarter of extra growth, 1.8 points of margin and a 27x exit, fair value is $481.20, 43.3% above the traded price. What it does not do is make the exit multiple conservative: 27x is above every large-cap aerospace comparable except Heico, and stripping it back to the base case's 20x removes about $75 a share of this case on its own.

Defense & Propulsion Technologies

Basis quarter$3.44B
Final quarter$6.19B
Implied CAGR+12%
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: $6.19B (2031Q2E)

Period Value
2026Q1 $3.21B
2026Q2 $3.44B
2026Q3E $3.55B
2026Q4E $3.67B
2027Q1E $3.78B
2027Q2E $3.90B
2027Q3E $4.02B
2027Q4E $4.14B
2028Q1E $4.26B
2028Q2E $4.39B
2028Q3E $4.52B
2028Q4E $4.66B
2029Q1E $4.79B
2029Q2E $4.93B
2029Q3E $5.07B
2029Q4E $5.22B
2030Q1E $5.37B
2030Q2E $5.53B
2030Q3E $5.69B
2030Q4E $5.85B
2031Q1E $6.02B
2031Q2E $6.19B

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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