Beatrice Lang
General Electric (GE) has had a tumultuous history, from its beginnings as one of the first electric companies under Thomas Edison in the late 19th century to its peak in 2000 as a multinational conglomerate led by Jack Welch. Despite its well-publicized decline, GE remains a significant player in its three main sectors: aerospace, energy, and healthcare. In 2024, the company split into three independent entities, marking the end of its 132-year history as a conglomerate. This move was part of CEO Larry Culp's efforts to revive the company after a series of failed investments and the impact of the 2008 financial crisis. The breakup resulted in GE Aerospace, GE Vernova, and GE Healthcare, each focusing on its core strengths and growth opportunities. GE Vernova, in particular, has demonstrated strong financial performance, with its shares rising over 13% to an all-time high in 2025. With a leaner model, a strong cash position, and a focus on the aviation industry, GE appears to be on an upward trajectory, providing optimism for shareholders and analysts alike.
| Characteristics | Values |
|---|---|
| GE's three-way split | GE HealthCare, GE Aerospace, and GE Vernova (energy) |
| GE's aerospace business | GE Aerospace shares were up about 2% at mid-afternoon |
| GE's healthcare business | GE Healthcare |
| GE's energy business | GE Vernova shares rose about 5% |
| GE's stock price in 2000 | Peaked |
| GE's stock price in 2025 | $135 |
| GE's fair value price target | $210.12 per share |
| GE's profits | $6 billion |
| GE's revenues | $69 billion |
| GE's full-year free cash flow forecast | $3 billion to $3.5 billion |
| GE's previous free cash flow (FCF) target | $2 billion to $2.5 billion |
| GE's 2025 revenue | $36 billion to $37 billion |
| GE's 2028 operating profit | $10 billion |
| GE's market value | More than $100 billion |
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What You'll Learn
GE's three-way split into GE Aerospace, GE Vernova, and GE Healthcare
General Electric (GE) has been on a journey of transformation, and in 2024, it completed its transition to split into three separate publicly traded companies: GE Vernova, GE Aerospace, and GE Healthcare. This move was part of a multi-year financial and operational transformation strategy to strengthen the business and enhance its focus on core strengths and growth opportunities within its primary sectors.
GE Vernova, the energy division, began trading under the ticker symbol "GEV" and represents the company's standalone energy business. The company raised its free cash flow forecast and beat Wall Street estimates for the second-quarter profit in 2025, sending its shares up by more than 13% to an all-time high.
GE Aerospace, the largest division of the former conglomerate in terms of revenue, retained the "GE" ticker symbol. It focuses on aviation technology, including airplane engines, jet engines, and avionics and power systems for governments, militaries, and commercial airframers. The company's second-quarter results in 2025 were described as "blowout," leading Wall Street to raise its targets for the stock price, anticipating record highs.
GE Healthcare, which was spun off earlier, trades under the ticker symbol "GEHC" and has gained about 57% in value since it started trading. This division completes the trifecta, allowing each company to focus on its specific industry and unlock growth opportunities.
The three-way split is a strategic move by GE to enhance its performance and attract investors. By creating independent companies, GE addresses the challenge of being "'under-owned' in each of its categories, as investors can now focus on specific sectors without being intimidated by the size and diversity of the former conglomerate.
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GE's cash flow and balance sheet strength
In 2023, GE generated almost 70% more free cash flow than in 2022, and monetised about $9 billion in proceeds from its equity stakes in Baker Hughes, AerCap, and GE HealthCare. The company also simplified and strengthened its balance sheet, making capital allocation decisions and returning about $7 billion to shareholders through dividends, buybacks, and retiring its preferred equity.
GE's 2023 results reflected a company on the rise, with total orders increasing by 25% organically to $79.2 billion and total revenues growing by 17% to $68 billion. The company's profit margin expanded significantly, with GAAP profit margin jumping by 1,640 basis points to 15.0%, and adjusted profit margin growing by 310 basis points organically to 8.8%. Cash from operating activities also saw a healthy increase of 38% to $5.6 billion, with free cash flow up by 68% to $5.2 billion.
GE's financial achievements in 2023 were important as they set the stage for the upcoming spin-offs of GE Aerospace and GE Vernova. These results demonstrated the company's ability to generate substantial profits and cash flow, which are crucial for funding innovation and growth in the competitive industrial products industry.
In 2024, GE Aerospace delivered a strong financial performance, with double-digit orders and adjusted revenue growth, operating profit up $1.7 billion, and free cash flow up $1.3 billion. As a result, the company returned more than $6 billion to shareholders through share repurchases and dividends. GE Aerospace's financial success can be attributed to the robust post-pandemic commercial aerospace recovery, with demand for new builds and aftermarket services soaring as the world returns to flight and airlines modernise their fleets.
GE Vernova, which became independent in 2024, raised its free cash flow (FCF) target to between $3 billion and $3.5 billion, up from its earlier forecast of $2 billion to $2.5 billion. The company expects 2025 revenue to be at the higher end of a range of $36 billion to $37 billion.
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GE's jet engine business
General Electric (GE) has had a long history in the jet engine business, dating back to the 1900s. In 1903, GE hired Sanford Alexander Moss, who initiated the development of turbosuperchargers, leading to a series of record-breaking flights. This technology became standard equipment on almost all military aircraft before WWII, with GE as a world leader in this field.
GE's jet engine work took place at its plants in Syracuse, New York, and Lynn, Massachusetts, but eventually concentrated on the latter. The Lynn plant, now called the "Aircraft Gas Turbine Division", assembles jet engines for the US Department of Defense, subsidiary services, and commercial operators. The engines assembled include the F404, F414, T700, and CFE738, as well as the CF34 regional jet engine and its variants.
GE has also formed partnerships to enhance its jet engine business. In 1974, GE entered a joint venture with Snecma of France, creating CFM International to produce the CFM56 turbofan engine. The final assembly for this engine is conducted at the GE plant in Evendale, Ohio. Additionally, GE was selected by Boeing to power its new 787 aircraft with the GEnx engine, a development of the GE90.
GE has continued to innovate in the jet engine space, incorporating 3D printing technologies and acquiring companies like Arcam EBM and Concept Laser to enhance manufacturing processes. The GE9X, the largest jet engine in the world, is an example of GE's advancements in this field.
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GE's CEO Larry Culp's cost-cutting and streamlining operations
H. Lawrence Culp, Jr., or Larry Culp, is the Chairman and Chief Executive Officer (CEO) of GE Aerospace. He joined the GE Board of Directors in April 2018 and was appointed CEO of GE in October 2018.
Larry Culp has been instrumental in restructuring and streamlining General Electric (GE). He has focused on improving operations and finances, with a philosophy of process optimization called "lean", which is based on Toyota's kaizen methods. This approach involves a relentless focus on safety, quality, delivery, and cost. During his tenure, GE has strengthened its balance sheet, reduced debt, grown profits, improved earnings-per-share, and quadrupled its market capitalization.
Culp has also overseen the splitting of GE into three independent, investment-grade public companies: GE HealthCare, GE Vernova, and GE Aerospace. This move aimed to enable each company to focus on its core strengths and growth opportunities within its respective industry. The spinoff has been successful, with each company increasing shareholder value and becoming an industry leader with substantial annual revenue.
Culp's operational focus and commitment to product quality and customer satisfaction stand in contrast to the previous emphasis on boosting shareholder returns through dividends and buybacks. His transformation of GE has been well-received by Wall Street, resulting in a significant increase in the company's stock price. Culp's leadership has been recognised by various institutions, and he has consistently ranked as one of the top CEOs in annual surveys.
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GE's stock performance relative to the S&P 500
General Electric (GE) has been at the heart of American industrial prowess for over a century. In 2024, the company split into three separate entities, each focusing on a particular industry: GE HealthCare, GE Aerospace, and GE Vernova (energy).
GE HealthCare leverages cutting-edge diagnostic and imaging technologies to capitalise on a rapidly growing and evolving market. GE Aerospace designs and manufactures commercial and defence aircraft engines, integrated engine components, electric power, and mechanical aircraft systems. GE Vernova, which became independent in 2024, focuses on the energy industry, providing products and services to nuclear energy companies.
GE Vernova was the second-worst-performing stock in the S&P 500 on Tuesday, with shares down about 7%. However, over the past 12 months, GE Vernova's stock has nearly tripled, with shares up roughly 50% year-to-date. GE Vernova raised its free cash flow (FCF) target to between $3 billion and $3.5 billion, with expected 2025 revenue trending towards $36 billion to $37 billion.
GE Aerospace stock has surged 6.6% after releasing impressive Q4 results. Over the past 52 weeks, GE Aerospace has soared 66.3%, outpacing the S&P 500's 17.5% gains over the same period. GE Aerospace has a market cap of $222.1 billion and employs nearly 52,000 people. The company has an installed base of more than 44,000 commercial and over 26,000 military aircraft engines.
GE, META, and MCB were recently ranked as Strong Buy momentum stocks by Zacks Rank #1. GE's aviation, power, renewable energy, and healthcare segments have delivered standout earnings growth in 2025, signalling potential upside for investors.
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Frequently asked questions
General Electric's stock went up in 2024 due to its three-way split into GE Aerospace, GE Vernova, and GE Healthcare. This breakup was an attempt to revive the company after a period of financial struggle.
After the three-way split, GE Aerospace shares were up by about 2%, while Vernova rose by about 5%.
General Electric had been struggling with weak profits, a mountain of debt, and bad investments. Its stock had fallen nearly 80% from its highs in 2000, and the COVID-19 pandemic further impacted its lucrative jet engine business.
Analysts believe that GE has an upside potential of 21%, with a fair value price target of $210.12 per share. However, it is important to maintain a healthy dose of skepticism, as the price-to-earnings ratio is currently high. Additionally, in the context of high oil prices and elevated interest rates, there is a question of whether GE will underperform the S&P over the next 12 months or see a strong jump.
