- Jim Cramer said the recent selloff in aerospace stocks is creating opportunities for long-term investors, arguing that “the idea that higher fuel prices and higher interest rates will kill demand just looks flat-out wrong.” He called GE Aerospace a buy and was more cautious on Boeing.
- Even after rising more than 3% on Tuesday, GE Aerospace is 23% below its 52-week high of nearly $389 set on Aug. 6, which implies a share price of roughly $300 (Lumida calculation), and down 3% this year. Boeing’s slide of more than 10% on Tuesday left it down 23% in 2026, while the iShares U.S. Aerospace & Defense ETF is down about 4% and the S&P 500 is up more than 12.5%.
- GE’s commercial aerospace orders surged 58% in the third quarter, including a 235% jump in equipment orders, lifting its backlog to $170 billion. Free cash flow fell 14% and came in slightly short of expectations, and the stock trades at roughly 37 times the midpoint of its updated full-year earnings guidance.
- Boeing received 300 net commercial aircraft orders in the quarter, taking its commercial backlog to more than 6,300 planes worth a record $612 billion, and its defense backlog hit a record $101 billion. But a multiyear free cash flow outlook that fell short of expectations, partly due to spending on a new Navy fighter jet contract, sent the stock to 52-week lows.
What Happened?
Aerospace stocks have been under pressure for months on concerns that higher oil prices and interest rates will cut demand for new aircraft, since fuel costs squeeze airline profits and higher rates make planes more expensive to finance. Cramer said Tuesday that GE’s order numbers, especially for new commercial equipment, show those fears are misplaced. “GE looks fine to buy now,” he said, even though the quarter was not the clean “beat-and-raise” its multiple demands. Boeing’s third quarter was mixed, and free cash flow beat estimates, but executives said the company would not significantly ramp up 737 Max production until late next year.
Why It Matters?
The split shows how investors are separating suppliers with visible order momentum from manufacturers still working through a turnaround. GE’s 58% jump in commercial orders points to strong demand for engines and services, which supports its premium valuation if growth continues. For Boeing, free cash flow is the key metric in its recovery, and a lower multiyear outlook resets what investors can expect even with a record backlog.
What’s Next?
Cramer said he hopes Boeing’s reset “can be a clearing event,” with remaining investors using more realistic free cash flow targets, though the shares could slip further. For GE, the next catalysts are continued order growth and whether free cash flow reaccelerates to justify its valuation. Oil prices and Treasury yields remain the main macro risks for the whole sector, including the iShares aerospace ETF.
Affected Tickers and Coins: GE, BA, ITA
Source: CNBC
