GE Aerospace (NYSE:GE)

The valuation ratios exhibit notable shifts over the observed period, spanning from March 31, 2022, to December 31, 2025. A general pattern of increasing valuation multiples is evident, particularly from the latter half of 2023 through 2025, though the magnitude of change varies significantly across ratios.

Price to Earnings (P/E)

The Price to Earnings ratio remained relatively stable in the period from March 2023 to September 2023, fluctuating between 12.72 and 16.18. A substantial increase is then observed, rising to 52.90 by March 2024. While the ratio decreased from this peak to 36.01 by December 2025, it remained considerably higher than levels seen in the earlier part of the analyzed timeframe. This suggests a significant shift in investor expectations regarding future earnings.

Price to Operating Profit (P/OP)

The Price to Operating Profit ratio demonstrates a generally upward trend, though with more moderate fluctuations than the P/E ratio. Starting at 17.08 in March 2022, it increased to 28.45 by December 2025. The period between June 2023 and December 2024 shows the most pronounced increase, indicating growing investor confidence in the company’s operational profitability.

Price to Sales (P/S)

The Price to Sales ratio exhibits the most dramatic increase of all the ratios analyzed. Beginning at 1.25 in March 2022, it steadily climbed to 7.41 by December 2025. The acceleration in growth is particularly noticeable from March 2024 onwards, with the ratio more than doubling between March 2024 (3.02) and June 2025 (7.34). This substantial increase suggests investors are willing to pay a significantly higher premium for each dollar of revenue generated.

Price to Book Value (P/BV)

The Price to Book Value ratio also shows a consistent upward trend, albeit from a lower base than the P/S ratio. It increased from 2.27 in March 2022 to 16.78 by December 2025. The most significant increases occurred between September 2023 and June 2025, indicating a growing perception of the company’s underlying asset value and a willingness to pay a premium for its net assets. The ratio’s increase from 5.43 in December 2022 to 16.78 in December 2025 is particularly noteworthy.

In summary, the observed trends across all four valuation ratios point to a substantial re-evaluation of the company by investors over the analyzed period. The increasing multiples suggest heightened optimism regarding future earnings, operational performance, revenue growth, and asset value. The acceleration in these increases from 2023 onwards warrants further investigation to understand the underlying drivers of this shift in market sentiment.

The price-to-earnings (P/E) ratio exhibits significant fluctuation over the observed period. Initially, the P/E ratio is unavailable for the first four quarters, coinciding with periods of negative earnings per share (EPS). A positive P/E ratio emerges in March 2023, indicating a transition to profitability.

Initial Period (Mar 31, 2022 – Dec 31, 2022)

During this timeframe, negative EPS values prevent the calculation of a meaningful P/E ratio. This suggests the company was experiencing losses, making traditional valuation based on earnings challenging.

Stabilization and Growth (Mar 31, 2023 – Jun 30, 2023)

The P/E ratio begins at 12.78 and increases to 13.82, reflecting improving earnings and a modestly increasing share price. This suggests a period of initial recovery and investor confidence.

Fluctuation and Increase (Sep 30, 2023 – Dec 31, 2023)

The P/E ratio fluctuates between 12.72 and 16.18, indicating some volatility in investor sentiment. Despite this, the ratio demonstrates an overall upward trend, driven by both increasing earnings and share price.

Significant Expansion (Mar 31, 2024 – Jun 30, 2024)

A substantial increase in the P/E ratio is observed, moving from 52.90 to 40.07. This is primarily attributable to a significant rise in share price relative to EPS, potentially indicating heightened investor expectations or a market re-evaluation of the company’s future prospects.

Moderation and Continued Growth (Sep 30, 2024 – Dec 31, 2025)

The P/E ratio moderates, ranging between 30.60 and 36.01. While still elevated compared to earlier periods, this suggests a stabilization of investor sentiment. The ratio demonstrates a slight upward trend overall, coinciding with continued growth in both share price and EPS.

Overall, the P/E ratio demonstrates a clear progression from uncalculable values due to losses to a consistently positive and increasing ratio. The most dramatic increase occurs between March and June 2024, followed by a period of relative stabilization with continued growth. This pattern suggests a strengthening financial position and evolving investor perception.

The Price to Operating Profit (P/OP) ratio exhibits considerable fluctuation over the observed period, spanning from March 31, 2022, to December 31, 2025. Initially, the ratio demonstrates a decreasing trend from 17.08 to a low of 13.51, followed by a period of volatility before increasing to 19.88 by the end of 2022.

Overall Trend

From the beginning of 2023 through the end of 2025, the P/OP ratio generally trends upward, although not consistently. The ratio more than doubles from 20.39 in March 2023 to 30.56 in September 2025. This suggests increasing investor confidence relative to operating profitability over this timeframe.

A notable increase in the P/OP ratio is observed between March 2024 and June 2025, rising from 28.91 to 30.56. This coincides with a substantial increase in the share price, while operating profit per share also increased, but at a slower rate. The ratio experiences a slight decrease in the final quarter of 2025, settling at 28.45.

Volatility

The period between March 2022 and December 2023 shows more variability in the P/OP ratio compared to the later period. The ratio fluctuates within a range of approximately 6.5, indicating a less stable relationship between price and operating profit during those years. The range narrows to approximately 2.1 between September 2025 and December 2025, suggesting a more consistent valuation.

The highest P/OP ratio recorded is 30.56 in September 2025, while the lowest is 13.51 in June 2022. The consistent increase in the ratio during the latter part of the period suggests that investors are willing to pay a higher premium for each dollar of operating profit, potentially reflecting positive expectations regarding future growth or improved efficiency.

Share Price and Operating Profit Relationship

The P/OP ratio’s movements are influenced by both share price and operating profit per share. While both generally increased over the period, the share price increases appear to have a more significant impact on the ratio, particularly in the latter half of the observed timeframe. This suggests that market sentiment and external factors may be playing a larger role in valuation.

The price-to-sales (P/S) ratio exhibited a generally increasing trend over the observed period, punctuated by periods of fluctuation. Initially, the ratio demonstrated some volatility, followed by a sustained upward movement beginning in the latter half of 2022 and continuing through 2025. This trend is largely driven by changes in both the share price and sales per share, though the relative contributions of each component shifted over time.

Initial Period (Mar 31, 2022 – Dec 31, 2022)

The P/S ratio began at 1.25 and experienced a slight decrease to 1.10 before stabilizing around 1.11 to 1.20. This period suggests relative equilibrium between price and sales, with minor fluctuations. The share price decreased from $80.59 to $71.51 before recovering to $81.29, while sales per share showed a modest increase.

Accelerated Increase (Mar 31, 2023 – Dec 31, 2023)

A noticeable increase in the P/S ratio commenced in the spring of 2023, rising from 1.51 to 2.30 by year-end. This increase coincided with a substantial rise in the share price, from $98.44 to $136.54, while sales per share experienced a decline from $65.22 to $59.32. The increasing ratio suggests investors were willing to pay a higher premium for each dollar of sales.

Peak and Subsequent Adjustment (Mar 31, 2024 – Dec 31, 2025)

The P/S ratio continued its ascent, peaking at 7.34 in June 2025. This was driven by a significant increase in share price, reaching $262.86, while sales per share continued to decline, reaching a low of $32.72 in December 2024 before a slight recovery to $40.35. The ratio then experienced a modest decrease to 7.41 by the end of the period. This suggests a potential stabilization or correction after a period of rapid growth, as the share price increase outpaced the sales decline.

Overall, the observed trend indicates a growing investor confidence, reflected in the increasing willingness to pay a higher price relative to sales. However, the declining sales per share throughout much of the period warrants further investigation to understand the underlying drivers and potential sustainability of this valuation trend.

The price-to-book value (P/BV) ratio exhibits a notable upward trend over the observed period, punctuated by periods of relative stability. Initially, the ratio fluctuated around 2.2 to 2.5 from March 2022 to December 2022. A significant increase began in the first quarter of 2023, continuing through the end of 2025, though with some moderation in the final quarter.

Initial Period (Mar 31, 2022 – Dec 31, 2022)

The P/BV ratio remained relatively stable, ranging between 2.26 and 2.53. This suggests a consistent market valuation of the company’s net asset value during this timeframe. The share price and book value per share both experienced fluctuations, but these movements largely offset each other, resulting in a consistent P/BV.

Ascending Trend (Mar 31, 2023 – Jun 30, 2025)

From March 2023, the P/BV ratio began a sustained increase, rising from 3.39 to a peak of 17.19 in September 2025. This indicates a growing investor confidence in the company’s ability to generate earnings relative to its book value. The share price increased at a considerably faster rate than the book value per share during this period, driving the ratio higher. The ratio experienced its largest single-quarter increase between March and June 2023.

Recent Moderation (Sep 30, 2025 – Dec 31, 2025)

The final quarter of the observed period shows a slight decrease in the P/BV ratio, moving from 17.19 to 16.78. While still significantly elevated compared to earlier periods, this suggests a potential stabilization or a slight correction in market valuation. The share price decreased slightly while the book value per share remained relatively constant.

The book value per share generally decreased from March 2022 to December 2023, before showing a slight increase and then stabilizing between $17.81 and $18.05. This contrasts sharply with the share price, which demonstrated consistent growth throughout the period, particularly accelerating from the beginning of 2023. The divergence between share price and book value per share is the primary driver of the observed increase in the P/BV ratio.