GE Aerospace has broken sharply higher this week, gaining 10.2% to close at $314.49, but the options market is now flashing the most defensive signal of the past month — a notable divergence from the bullish tape.
The clearest tension is in options positioning. The put/call ratio jumped to 0.87, nearly 2.8 standard deviations above its 20-day mean of 0.71 — the highest defensive reading in over a month. That follows three weeks of relatively calm, neutral options flows. Something has changed at the margin: as the stock has rallied hard, traders have moved to buy downside protection at a pace well above the recent norm. That doesn't negate the price move, but it does suggest a portion of the market is treating this week's gain with scepticism rather than chasing it.
Short positioning tells a different story. Short interest is low at 1.5% of free float, barely moved on the week (up 0.3%), though the 30-day build of 34.5% is worth noting as an ongoing accumulation trend since late April. The key context is that shorts have added into a rising stock — and so far, they've been wrong. The borrow market gives them no pressure to cover: cost to borrow is 0.49%, still cheap despite edging up 11% on the week, and availability is extraordinarily loose with over 860 million shares available to lend. There is no squeeze mechanism in place. The shorts remain a modest, uncrowded position.
The Street remains constructive. Sixteen analysts carry Buy-equivalent ratings with a consensus mean target of $350. The most recent action — Seaport Global initiating at Buy with a $375 target on May 27 — lands above the group average and is the most bullish new entry in recent months. Morgan Stanley and UBS both trimmed targets after the Q1 miss in late April but held Overweight and Buy ratings respectively, signalling reduced conviction on valuation rather than a directional reversal. At 39x trailing earnings and 17.7x book, the stock is priced for execution — the bear case centres on engine delivery delays and legacy aftermarket weakness, while bulls point to LEAP program momentum and the services revenue flywheel. The valuation has re-rated meaningfully: the P/E has expanded by 3.3 turns and EV/EBITDA by 0.7x over the past 30 days, compressing the margin of safety.
The peer setup reinforces the bullish tone of the week. ATI gained 12.8% and MOG.A added 11.9%, suggesting a broad aerospace and defense rally rather than a GE-specific catalyst. HWM and HEI were more modest at 1.9% and 5.2% respectively — GE's move sits at the top of the peer range rather than being an outlier. That broad participation makes the defensive options skew more puzzling; if the whole sector is up, the put-buying in GE specifically warrants attention.
Earnings history adds a layer of caution. GE's last print on April 21 saw the stock drop nearly 9% on the day and 4.7% over the following week. The subsequent recovery has been sharp — the stock is now well above pre-earnings levels — but the pattern of large single-day swings around results is established. The next event is July 16. Between now and then, the question is whether the options market is pricing a standard pullback after a strong run, or something more specific about execution risk heading into Q2 results.
Watch whether the put/call ratio normalises in the coming sessions or continues to build — that will indicate whether this week's defensive hedging was tactical profit protection or the start of a more sustained repositioning.
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