A prolonged sell-off in aerospace stocks is creating buying opportunities for long-term investors, despite months of pressure from rising oil prices and interest rates, CNBC Earnings reported. The sector has faced headwinds as higher fuel costs squeeze airline profits, potentially forcing carriers to cut routes and scale back aircraft purchases, while elevated rates make financing new planes more expensive. GE Aerospace is down 23% from its 52-week high of nearly $389 per share on August 6, and is down 3% year to date. Boeing has fallen more than 10%, putting it down 23% in 2026. By comparison, the iShares U.S. Aerospace and Defense ETF is down roughly 4% year to date, while the S&P 500 is up over 12.5% in 2026.
GE Aerospace delivered a strong third quarter, with orders in its commercial aerospace business surging 58%, including a 235% increase in equipment orders that pushed its backlog to $170 billion. However, free cash flow fell 14% year over year and came in slightly below expectations, and the company's valuation remains elevated at roughly 37 times the midpoint of its updated full-year earnings guidance. Despite these shortcomings, the underlying strength of GE's business suggests the stock warrants consideration at current levels.
Boeing reported a mixed third quarter result, with free cash flow beating estimates. However, management outlined a multiyear free cash flow outlook that fell short of expectations, partly because of upfront spending tied to a new contract to develop next-generation fighter jets for the U.S. Navy. Executives also said the company would not significantly ramp up 737 Max production until late next year. Boeing received 300 net commercial aircraft orders during the quarter, bringing its commercial backlog to more than 6,300 planes valued at a record $612 billion. The company's defense backlog also reached a record $101 billion.
For savers and investors, aerospace sector weakness amid strong order backlogs suggests aircraft demand remains fundamentally sound even as near-term uncertainty persists.