Defense and Financials Rally While GM Tumbles on Guidance

GE Aerospace stock fell 3.7% on October 20, 2026, despite raising its 2026 forecast. The company increased its operating profit forecast to $10.9B-$11B and adjusted EPS to $8.00-$8.10. Q3 earnings beat expectations at $2.25 per share, with revenue matching estimates at $13.3B. Commercial engines and services revenue grew 21%, marking six consecutive quarters of at least 20% growth.

General Motors (GM) will close its Brownstown Battery Assembly plant in Detroit by next summer, as its lease expires. The facility produced battery packs for the Cadillac Celestiq and Corvette E-Ray, as well as hydrogen fuel cells in a joint venture with Honda. GM is shifting production to other facilities and has incurred $11.2 billion in EV-related charges. The plant's closure is part of GM's adjusted EV strategy, responding to softer demand and regulatory changes.

GE Vernova's shares fell 0.19% to $825.87 on October 23 ahead of its October 28 earnings report. The company has a $176 billion backlog, with $24.2 billion in orders and $11.1 billion in Q2 revenue. Investors will watch cash conversion, as full-year revenue is projected at $45.5B–$46.5B and free cash flow at $11.5B–$12.5B, according to management.

GE Aerospace (GE) stock fell 2.5% on Wednesday, marking a 9% decline this week. Despite beating earnings estimates with $2.25 per share and $13.3B in sales, Bernstein analyst Douglas Harned lowered his price target to $376, citing concerns over rising jet fuel prices due to the Iran war. GE's stock trades at 36x current-year free cash flow, with analysts forecasting 18% annual profit growth over the next five years.

General Motors (GM) stock fell 8% post-earnings despite beating EPS and revenue estimates. Analysts cut price targets citing cost pressures, with consensus EPS estimates declining. GM trades at a forward P/E of 5.4x, near fair value, with a $20B buyback program underway. Revenue growth has plateaued, and North America accounts for most operating profit.

GM reported $3.3B net income for Q3 and authorized a $20B share buyback. Its lending arm, GM Financial, increased its loan loss provisions by 39% to $340M, citing rising delinquencies. Ford and Stellantis also faced significant EV-related charges and financial strains in their lending arms.