BNP Paribas lowered its price target for GE Aerospace to $270 from $300. Analysts warn that faster aircraft retirements could reduce demand for high-margin maintenance and spare parts.
Airlines may retire up to 7,000 planes. This process is expected to occur over the next five years. The figure represents approximately 20% of the current global fleet.
The shift occurs as Boeing and Airbus accelerate production of fuel-efficient aircraft. Increased retirements of older jets using CFM56 engines will likely slow growth in the aftermarket segment. GE Aerospace generates a larger share of profits from these services compared to its competitors.