On Thursday, Truist Securities updated its outlook on GE Vernova (NYSE:GEV), raising the price target from $400.00 to $420.00. The firm has kept a Buy rating on the stock. The adjustment reflects a positive view on the company's future, especially in the gas equipment and electrification sectors.
With a market capitalization of $106.69 billion and trading near its 52-week high, GE Vernova has demonstrated remarkable momentum, delivering a 195.1% return over the past year. According to InvestingPro analysis, the stock is currently trading above its Fair Value, with 14 additional key insights available to subscribers.
The analyst at Truist Securities, Jordan Levy, provided insights on the revised forecast, noting an expected increase in gas equipment orders. This 16% hike in order projections is attributed to recent discussions about slot orders at GE Vernova's investor day and ongoing economic indicators that suggest robust support for domestic power as well as gas and power sectors under the new administration.
These orders are anticipated to escalate over the year, with the analyst expressing an intent to monitor for additional signs of potential growth in gas power. The company's solid financial position is reflected in its $34.42 billion in revenue over the last twelve months.
For the electrification segment, Truist Securities predicts a substantial 31% surge in orders for 2025, largely propelled by the grid solutions business and the demand for transformers and switchgears. The analyst also acknowledged the possibility of additional capacity expansion announcements from GE Vernova during the year to meet the escalating order demand, driven by the fast-paced growth in data centers, artificial intelligence, and the overall power requirements in the United States.
Despite anticipating a year-over-year revenue downturn in wind energy for 2025 as GE Vernova shifts away from its offshore business, the firm expects margin improvements bolstered by the onshore operations. Truist Securities concludes that GE Vernova is well-positioned to capitalize on the increasing demand for power and AI, forecasting a strong year ahead for the company's growth and free cash flow.
With its next earnings report due on January 22, investors seeking deeper insights can access the comprehensive InvestingPro Research Report, which provides detailed analysis of GE Vernova's financial health, valuation metrics, and growth prospects among 1,400+ top US stocks.
In other recent news, GE Vernova has made significant strides in its financial performance and strategic positioning.
The company has received an upgraded stock target from BofA Securities, reflecting the firm's confidence in GE Vernova's growth, particularly in the gas turbine market. The company's pricing strategy and recent successes in securing gas turbine reservations have been highlighted as contributors to this positive outlook.
GE Vernova has also announced a revised 2028 adjusted EBITDA margin target of 14%, up from the previous 10%. Further, the company anticipates generating approximately $14 billion in cumulative free cash flow from 2025 to 2028. In terms of capital allocation, GE Vernova has outlined a strategy that includes a $1 per share dividend and a $6 billion share buyback program.
Analyst firms Truist Securities and Jefferies have maintained a Buy rating on the company's shares, with Truist Securities reiterating a $400 price target. Similarly, Jefferies and Evercore ISI have raised their price targets for GE Vernova to $391 and $390, respectively. These recent developments provide insights into GE Vernova's strategic plans and financial targets.
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