GE Aerospace (GE) receives Old York Operational Quality (AA) Rating for fiscal year 2025
(AA) | Industrials | Aerospace & Defense
By: Old York Financial
A Private Principal Research Report
the verdict
Old York Financial has assigned GE Aerospace (GE) an Operational Quality (AA) Rating. Following its historic spin-off of the energy business (GE Vernova) in 2024, GE Aerospace has emerged as the "Sovereign of the Skies." It is now a pure-play propulsion powerhouse with a massive installed base of 44,000 commercial engines. While it achieved a record Operating Profit of $6.5 Billion in 2025, it receives a (AA) rather than a (AAA) due to the "Supply Chain Friction" plaguing the entire aerospace sector, which has delayed the ramp-up of the LEAP engine. However, its efficiency is peerless: it maintains a 20%+ Operating Margin in a capital-intensive industry. For the Principal, GE is the ultimate "Service Annuity" machine—70% of its revenue comes from services (parts and repair), making it functionally immune to the cyclicality of aircraft sales.
the old york analysis
owner earnings: the propulsion annuity We audit GE’s ability to generate cash while maintaining the high-tech tooling required for jet engine manufacturing.
2025 Operating Cash Flow: $6.20 Billion
(-) Capital Expenditures: ($1.10 Billion)
(+) Depreciation & Amortization: $0.95 Billion
OLD YORK OWNER EARNINGS: $6.05 Billion
Analyst Note: GE Aerospace is a "Cash Funnel." Because the majority of its profit comes from the aftermarket (repairs) rather than the initial engine sale, the machine requires relatively low CapEx (only 3.5% of revenue) compared to the massive cash it throws off. This is "High-Velocity Capital" at its finest.
growth & market dominance
Total Revenue (2025): $31.8 Billion (+18% YoY).
The Service Moat: Service revenue grew 22% in 2025. This is the "Oil" in the GE machine. Once an engine is bolted to a wing, GE owns the next 25 years of that engine's maintenance life.
Market Share: ELITE. GE (including its CFM joint venture) powers 3 out of every 4 commercial flights globally.
Pricing Power: ABSOLUTE. In a world where flight demand is soaring and engine parts are scarce, GE holds all the cards. Their ability to raise service prices faster than inflation is the core of their (AA) rating.
operational efficiency
ROIC (Return on Invested Capital): 18.2%.
ROE (Return on Equity): 24.5%.
Operating Margin: 20.4% (Up from 19.1% in 2024).
Analyst Note: A 20% margin in heavy aerospace is world-class. GE is currently utilizing "FLIGHT DECK" (their proprietary lean operating system) to grind out internal friction. They managed to increase output by 15% in 2025 despite a global shortage of castings and forgings.
the fortress check
Debt / Equity: 0.62.
Long-Term Debt: $12.4 Billion.
Debt to Free Cash Flow: 2.1x.
Capital Allocation: THE REBOUND KING. GE returned $5.5 Billion to shareholders in 2025 through its first major post-split buyback program and a triple-digit dividend increase (from a low base).
Solvency: FORTRESS. Following the deleveraging of the old "General Electric" conglomerate, the Aerospace machine is lean. It holds $13 Billion in cash, giving it a Net Debt of effectively zero. Liquidity: Current Ratio of 1.55. The machine has ample "Coolant" to navigate any sudden shocks to global travel.
final determination
Rating: Old York Quality (AA)
Classification: The Propulsion Sovereign.
GE Aerospace is the most disciplined industrial machine in the 2026 portfolio. It is a (AA) because it combines the "Software-like" margins of the aftermarket with the "Physical Moat" of jet engines. It only misses the (AAA) because of its dependency on Boeing and Airbus's delivery schedules, which GE cannot fully control.
Disclaimer: Old York Financial operates privately as a principal and sells corporate advisory. Old York Financial is not an accountant, a financial advisor, a broker, an agent, a lawyer, or a portfolio manager. This report is for informational purposes only.
