Artisan Global Opportunities Fund on GE Aerospace
Thesis
GE Aerospace is the largest commercial aircraft engine manufacturer, benefiting from installed engine demand, aftermarket activity and new production. The fund opened a small position after geopolitical events raised worries about airline costs, ticket prices and passenger demand. Its research found resilient travel and little evidence of a pullback in aircraft orders or maintenance activity. The team expects a long-duration profit cycle from the engine backlog, higher deliveries and deferred shop visits, and increased the position to a small Crop holding.
“We believe GE Aerospace is positioned for a long-duration profit cycle”
Key risks
- Higher airline operating costs and ticket prices could weaken passenger demand.
- Weaker airline demand could reduce aircraft orders and future engine revenue.
- Aftermarket growth depends on maintenance demand and normalization of deferred shop visits.