Prominent Wall Street analyst has doubts about GE AerospaceIt is (NYSE:GE) current quarter, and investors are taking note.
Shares of GE Aerospace fell 4% as of 11:30 a.m. ET after JPMorgan Chase cut its second-quarter sales estimate to $8.4 billion, the lowest among analysts.
Supply chain chaos could hurt deliveries
GE Aerospace is the last part of the former industrial conglomerate, now that the healthcare and energy assets have been separated as independents. The company is a major producer of aircraft engines and other components.
JPMorgan’s Seth Seifman worries that continued supply chain constraints could hamper deliveries of new engines and weigh on current quarter results. The analyst set a quarterly revenue target of about $400 million below the Wall Street consensus of $8.8 billion.
He also believes there could be a risk to GE Aerospace’s full-year delivery target.
It’s worth noting that as a new program ramps up, initial deliveries are recorded at a loss, so forecasts do not affect GE Aerospace’s adjusted profit or cash flow estimates. Seifman maintains an overweight on the stock with a price target of $175.
Is now the time to buy GE Aerospace?
Note that although Seifman is pessimistic in the short term, he remains optimistic in the long term. Investors would do well to do the same.
The aerospace industry today benefits from robust demand, but it also faces significant headwinds from supply chain challenges and ongoing business challenges. Boeing. Over time, these goals will be resolved and demand will fill order books for years to come.
Investors who can handle some bumps along the way should be well rewarded over time.
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JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Lou Whiteman has no position in any of the stocks mentioned. The Motley Fool ranks and recommends JPMorgan Chase. The Mad Motley has a disclosure policy.
Why GE Aerospace is losing altitude today was originally published by The Motley Fool
