One Wall Street analyst thinks GE Aerospace shares will reach $212. Is it a purchase?

Another week, another analyst upgrade for GE Aerospace (GE -0.26%)with Deutsche Bank raising our price target for the stock from $210 to $212 and maintaining a buy rating. The target implies a 12.7% increase in the share price over the next 12 months.

Wall Street is in love with GE Aerospace

This update comes a few weeks after Bernstein initiated coverage with a $201 price target and an outperform rating on the stock. Given the difficulties from other aerospace-focused large-cap stocks such as Boeing and RTXit’s no wonder GE Aerospace is now favored among the analyst community.

Boeing continues to face a host of issues, not the least of which are ramping up aircraft deliveries, RTX’s Pratt & Whitney division still taking engines out for inspection, lowering cash flow expectations in legal matters and ending development projects at fixed price in defense. Meanwhile, GE Aerospace has doubled its full-year profit estimates already this year.

Additionally, Deutsche Bank analysts believe GE will report third-quarter earnings per share of $1.20, compared to the Wall Street consensus of $1.11, fueled by improved aerospace business margins, increased parts sales and sales relatively larger body parts.

Is GE Aerospace stock a buy?

GE Aerospace has excellent momentum and slower acceleration in LEAP engine shipments — management now expects 0%-5% growth in LEAP engine shipments, compared to 20%-25% growth expected at the start of the year — it is positive for short-term profitability, as aircraft engines tend to make losses.

In addition, Boeing and Airbus“Lower year-round delivery expectations mean older GE engines are being run longer, helping to generate higher-margin aftermarket revenue. The company has many short-term headwinds.

However, with the stock trading at just under 36 times estimated 2025 earnings, it’s hard to believe that the good news is already priced in and at some point GE will accelerate deliveries of loss-making engines . Overall, while the $212 price target looks achievable over time, it could take some time to get there given the current valuation.