TLDR
- GE Aerospace is acquiring Consolidated Precision Products (CPP) for $11.75 billion from private equity firms Warburg and Berkshire Partners.
- CPP makes complex metal castings used in jet engines and has supplied GE for over 15 years, providing roughly 25% of its blades and vanes.
- Jim Cramer called the deal a defense-driven win, saying it will “send this stock up.”
- GE’s Defense and Propulsion Technologies segment grew revenue 16% to $3.4 billion in Q2 2026, with a $210 billion total backlog.
- Bernstein reiterated an Outperform rating with a $421 price target; Jefferies kept a Buy rating with a $455 target.
GE Aerospace (GE) announced the acquisition of Consolidated Precision Products for $11.75 billion, a deal that brings a key parts supplier in-house and doubles down on the company’s defense push.
GE stock closed at $334.91 the day of the announcement, up 21.94% over the past year. The stock had pulled back 9.5% over the prior month, giving the deal news a lower base to react from.
CPP is one of the world’s largest producers of complex castings, including nickel superalloy, titanium, aluminum, magnesium and steel components. The Cleveland, Ohio-based company employs around 6,600 people across more than 20 facilities globally.
CPP is expected to generate roughly $2.0 billion in 2027 revenue. About 60% of that is tied to commercial aerospace, 20% to defense, and 20% to power and other markets.
The deal is valued at 18 times CPP’s 2027 EBITDA net of synergies, or 26 times without them. The sellers, Warburg and Berkshire Partners, are two private equity firms exiting a long-held industrial asset.
CPP has supplied GE for more than 15 years, producing components for LEAP, GEnx, T700, F110 and F404 engines. Roughly 25% of GE’s blades and vanes come from CPP, making this more of a vertical integration move than a new strategic direction.
Jim Cramer weighed in on Mad Money on September 8, calling it “a great acquisition” and pointing to the defense angle as the key driver. “Everyone’s crazy to see them building up defense,” he said.
Defense Segment Driving the Thesis
GE’s Defense and Propulsion Technologies segment posted $3.443 billion in Q2 2026 revenue, up 16% year over year. The full-year operating profit outlook for the segment was raised to between $1.6 billion and $1.7 billion.
Programs including the XA102 adaptive engine, GEK1500 for small combat aircraft, and F404 orders from Turkish Aerospace and Hindustan Aeronautics give the defense pipeline real depth. A captive castings supplier feeds all of them.
Analysts Stay Bullish
Bernstein reiterated an Outperform rating and $421 price target on GE following the announcement. Jefferies kept its Buy rating with a $455 target.
GE also secured a separate $2.87 billion contract from the U.S. Department of War to provide logistics support for F414 engine components used in the Navy’s F/A-18 E/F/G aircraft.
On the commercial side, GE’s Commercial Engines and Services segment posted $9.731 billion in Q2 revenue, up 27%, with LEAP deliveries up 41% in the first half. Total backlog stands at over $210 billion.
GE guides for adjusted EPS of $7.65 to $7.85 and free cash flow of $8.9 billion to $9.2 billion for full-year 2026.
For Q2 2026, GE reported adjusted EPS of $2.02, ahead of the $1.8565 consensus estimate.
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