Is GE Aerospace (GE) overvalued?
On Equity Rank's model estimate, GE trades 38% above its fair value. GE Aerospace (GE) last closed at $323.24; the multi-method model fair value is $234.56.
| Price | Model fair value | Price vs model |
|---|---|---|
| $323.24 | $234.56 | 38% above |
What the answer rests on
- 0 of 10 valuation methods put GE's value above its price and 10 put it below, so the methods mostly agree.
- To justify today's price, GE's free cash flow would need to grow about 21.3% a year for ten years (a reverse discounted cash flow). Over the last three years it actually grew 15.3% a year.
- GE trades at 37.6 times its last year's earnings, against a median of 31.4 for 37 profitable Aerospace & Defense companies.
- Over the past year the price sat below the model fair value on 0% of trading days. The gap ranged from 13% above to 122% above the model fair value.
Read this before relying on it
The model fair value is an estimate from published financial statements. It is not a forecast of where the price goes, and it can be wrong. Within 10% either side we call it close to fair value: valuation models are not precise enough to read more into a smaller gap. Our own lists have no proven edge over the market yet; the live record shows every result, misses included.
Every valuation method behind GE's fair value · What prices assume · Other companies