GE Aerospace

“GE Aerospace runs one of the most durable compounding flywheels in global industrials — a razor-and-blade engine services model with a structurally accelerating LEAP shop visit ramp, duopoly market positioning, and irreproducible CMC technology locking in 20-30 years of high-margin revenue per aircraft. The business earns 75%+ adjusted ROIC, generates $7B+ in annual FCF, and holds a $170B backlog with Larry Culp's credible execution underwriting the thesis. The singular problem is price: at 35x forward earnings and ~28x EV/EBITDA, the market has fully priced the franchise quality, embedding a decade of 12-13% FCF growth with no margin of safety. Base-case prospective returns of 7-9% CAGR are acceptable but not compelling for new capital; the thesis becomes a clear BUY in the $215-240 range where multiple compression risk is materially reduced.”