CNBC’s Jim Cramer said Tuesday that the recent slide in aerospace stocks could be creating an opportunity for investors who want to look beyond the industry’s short-term challenges.
The group has been under pressure for months as rising oil prices and interest rates raise concerns about demand for new aircraft. Rising fuel costs will squeeze airline profits, potentially forcing airlines to cut routes and reduce aircraft purchases. Rising interest rates will make financing new planes more expensive, further raising concerns about demand.
Despite rising more than 3% on Tuesday. ge aerospace The company is down 23% from its 52-week high of nearly $389 per share on Aug. 6. The stock price has fallen 3% since the beginning of the year. Boeing’s After falling more than 10% on Tuesday, CNBC Investing Club stock is now on track to fall 23% in 2026. iShares U.S. Aerospace & Defense ETF (ITA) is down about 4% year-to-date, while the broader market S&P 500 is up more than 12.5% in 2026.
“I still think this sector is a long-term winner if you’re willing to look long-term,” the “Mad Money” host said. “The idea that higher fuel prices and higher interest rates will kill demand seems completely wrong.” Here’s a closer look at where Kramer stands on the stock.
GE Aerospace YTD
GE Aerospace had a strong third quarter last week, but it still didn’t break out. Kramer sees the weakness as a buying opportunity, pointing to strong demand for the company’s jet engines. GE’s commercial aerospace business orders rose 58%, including a 235% increase in equipment orders, and the backlog reached $170 billion.
“Remember, a big concern for the aerospace sector is the idea that higher oil prices and interest rates will lead to fewer aircraft orders and, in turn, fewer orders for GE’s jet engines,” Cramer said. “However, the impressive order numbers from GE, especially for commercial and new equipment, clearly indicate this is not the case.”
This quarter was not without its flaws. While free cash flow fell 14% year over year, slightly below expectations, GE’s valuation remains high at roughly 37 times the midpoint of its updated full-year earnings outlook.
“When you get such high multiples, it has to be a clean ‘beat and raise,’ and we just couldn’t figure it out,” Kramer said. Still, he said the strength of GE’s underlying business outweighs these concerns. “GE seems like a good idea to buy now.”
Boeing’s first year
Mr. Kramer took a more cautious stance on Boeing.
The third quarter reported on Tuesday was largely mixed, but free cash flow came in better than expected. FCF is a noteworthy metric in Boeing’s turnaround efforts. However, it was the comments made at the earnings call that pushed the stock to a 52-week low. Management outlined a multi-year outlook for free cash flow, which was lower than expected, due in part to upfront investments in a new contract to develop next-generation fighter jets for the U.S. Navy. Executives also said the company will not significantly increase production of the 737 Max until late next year.
“We hope this reset will be a cleansing event,” Kramer said. “While some investors may give up, those who remain will likely set new, more realistic free cash flow targets going forward.”
Still, Kramer pointed to Boeing’s significant backlog as evidence that demand for aircraft remains strong. The company received 300 net commercial aircraft orders during the quarter, bringing its commercial backlog to more than 6,300 aircraft, valued at $612 billion. The company’s defense balance also reached a record high of $101 billion.
Although GE Aerospace faces a tougher road ahead and the stock could fall further, Cramer remains optimistic about Boeing’s long-term prospects if management can meet its revised goals.
