Photograph by Luke Sharrett/Bloomberg
General Electric stock is having a very nice week, rising roughly 6%. There isn’t much news from
specifically, however. Investors, instead, are looking at news from commercial aircraft makers.
GE stock ended Thursday at $14.35, a 52-week high closing price. On an intraday basis, General Electric (ticker: GE) shares’ last 52-week high came on March 9 at $14.42, but shares closed at $14 that day.
An improving commercial aerospace business appears to be the reason for recent gains. On Thursday,
(AIR.France) announced plans to increase output of its A320 family of jets. The European airframe assembler says it will build 45 jets a month by the end of 2021, up from about 40 jets a month now.
The big news for GE though is Airbus’s target of building 64 jets a month by 2023. That is a big increase, and signals that Airbus believes commercial air traffic will continue to recover. Air traffic in the U.S., over the past week, is still down about 30% from prepandemic 2019 levels. But that actually is an improvement from recent months, and traffic is up about 480% year over year.
GE makes engines for both the A320 and
‘s (BA) 737 families of jets through its CFM joint venture with Safran (SAF.France). Safran stock is also seeing gains, rising about 3% for the week and trading just below a 52-week high.
Boeing is also looking to boost 737 MAX production rates in coming months, while also delivering some of the MAX inventories that were built while that plane was grounded worldwide between March 2019 and December 2020.
The increased output from Airbus—and Boeing—helps more than just GE and Safran; all aerospace suppliers benefit. Shares of
(RTX),
(HON), and Woodward (WWD), for instance, all rose roughly 3% to 4% this week. The
is up about 1.4%.
GE shares slipped about 2% in Friday trading, giving back some of the weekly gains. The
and S&P 500 were both up about 0.2% in midday trading.
Year to date, GE stock has gained about 31%, better than comparable gains of the overall market.
Write to editors@barrons.com
