GE Aerospace (NYSE:GE) stock edged lower in Monday’s premarket trading after the company announced a key milestone for a defense engine program. S&P 500 futures were flat, pointing to a steady broader market ahead of the open.
The modest decline appears to be a mild pullback near recent highs.
GE Aerospace, Kratos Expand Defense Push
GE Aerospace and Kratos Defense & Security Solutions Inc. (NASDAQ:KTOS) said their GEK800 engine received the U.S. military designation F143-ZZ-100.
The companies also secured a U.S. Air Force engineering, manufacturing and development contract. The GEK800 will serve as a second-source propulsion system for the Joint Air-to-Surface Standoff Missile, or JASSM.
The companies are developing small, lower-cost turbofan engines for cruise missiles, collaborative combat aircraft and other uncrewed aerial vehicles. The GEK800 is an 800-pound-thrust turbofan.
Technical Analysis
GE Aerospace remains in a longer-term uptrend. The stock is above its 20-day simple moving average of $360.90 and 50-day SMA of $356.43. It is also above its 100-day SMA of $326.76 and 200-day SMA of $318.44.
The broader trend remains constructive. The 20-day SMA is above the 50-day average, while the 50-day SMA remains above the 200-day average following a golden cross in June.
However, short-term momentum has cooled. The MACD is below its signal line, while its histogram is negative. That suggests buying momentum has weakened after the stock’s recent advance.
GE also remains below its August 52-week high of $388.84. That level could serve as resistance if the stock resumes its climb.
Key resistance sits near $383, while support is around $336.50.
Analyst Outlook
The stock carries a Buy consensus rating with an average price forecast of $395.73.
Recent analyst actions include Bernstein raising its price forecast to $421 with an Outperform rating. JPMorgan raised its forecast to $400 with an Overweight rating, while RBC Capital maintained an Outperform rating and $400 forecast.
Benzinga Edge Rankings
Benzinga Edge gives GE Aerospace a momentum score of 83.26 and a quality score of 89.28. Its growth score stands at 32.21, while its value score is 3.29.
The rankings point to strong momentum and quality. However, the low value score highlights the stock’s premium valuation.
Top ETF Exposure
GE Aerospace is a major holding in several industrial and aerospace-focused exchange-traded funds.
The Industrial Select Sector SPDR Fund (NYSE:XLI) has a 6.85% weighting in GE. The Invesco Aerospace & Defense ETF (NYSE:PPA) has a 9.80% weighting, while the Fidelity MSCI Industrials Index ETF (NYSE:FIDU) has a 5.38% weighting.
As a result, significant flows into or out of these ETFs can affect demand for GE shares.
Price Action
GE Aerospace shares were down 0.17% at $367.75 in Monday’s premarket trading, according to Benzinga Pro data.
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