GE Aerospace seen as buy opportunity after sell-off, Boeing faces longer cash flow reset

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GE Aerospace buy after sell-off

Highlights

GE Aerospace's commercial aerospace business reports 58% order growth and a 235% surge in equipment orders, lifting backlog to $170 billion despite a 14% decline in free cash flow.
Boeing shares fall over 10% on Tuesday and hit 52-week lows as management projects a slower free cash flow recovery and delays significant 737 Max production increases to late 2025.
Boeing's Q3 reveals 300 net aircraft orders, expanding its commercial backlog to over 6,300 planes valued at $612 billion and defense backlog to a record $101 billion.

Post-earnings divergence in aerospace

As reported by CNBC, Cramer said Tuesday that the recent retreat in aerospace shares is creating selective opportunities despite near-term pressure on the sector.

He argued that fears about fuel prices and borrowing costs undermining aircraft demand look overstated over the long term. GE Aerospace, even after rising more than 3% on Tuesday, is down 23% from its 52-week high of nearly $389 a share on Aug. 6 and down 3% year to date.

Cramer said GE Aerospace's third-quarter results support a constructive view on the stock despite the sell-off after earnings. He pointed to strong jet engine demand, with orders in the company's commercial aerospace business rising 58%, including a 235% jump in equipment orders, lifting backlog to $170 billion.

He also acknowledged weaker points in the quarter. Free cash flow falls 14% from a year earlier and comes in slightly below expectations, while the stock trades at about 37 times the midpoint of GE's updated full-year earnings guidance.

Even so, Cramer says the strength of the underlying business outweighs valuation and cash flow concerns for investors with a longer time horizon. In his view, GE Aerospace remains attractive after the pullback.

Boeing outlook reset clouds recovery path

Boeing draws a more cautious assessment after a mixed third quarter, even though free cash flow beats estimates. Cramer says that metric remains central to the company's turnaround, but management's multiyear free cash flow outlook disappoints investors and pushes the shares to 52-week lows.

The weaker reaction follows comments on the earnings call that include upfront spending tied to a new contract to develop next-generation fighter jets for the U.S. Navy. Executives also say Boeing will not significantly increase 737 Max production until late next year, adding to concerns about the pace of recovery.

Boeing shares fall more than 10% on Tuesday and are down 23% in 2026. That compares with a decline of roughly 4% for the iShares U.S. Aerospace & Defense ETF, while the S&P 500 is up more than 12.5% this year.

Still, Cramer says Boeing's backlog shows aircraft demand remains intact. The company books 300 net commercial aircraft orders during the quarter, lifting its commercial backlog to more than 6,300 planes valued at a record $612 billion, while its defense backlog reaches a record $101 billion.

He says Boeing faces a tougher road than GE Aerospace and its shares could fall further. But he remains optimistic about the company's longer-term prospects if management delivers on its revised free cash flow targets.

In our earlier coverage of the S&P 500’s push toward 8,000, we outlined how investors were weighing strong Q3 earnings expectations against a tougher backdrop of higher oil prices, elevated Treasury yields, and political uncertainty. That analysis also highlighted growing concentration risk, with market breadth weakening as megacaps carried index performance and more stocks traded below key moving averages.

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