Street Calls of the Week
On Friday, BMO Capital Markets updated its outlook on GE Vernova (NYSE:GEV), significantly raising the price target from $381.00 to $522.00 while maintaining an Outperform rating on the shares. The firm’s analysts believe that the stock has further room to grow even after its recent strong performance, which has seen GE Vernova’s shares outperform the S&P 500 index with a gain of 49%.
The review of GE Vernova’s financial prospects included an update to the company’s outer year estimates, particularly focusing on 2028-2030. BMO Capital’s analysts increased their assumptions for gas power equipment pricing and service margin assumptions within these estimates. Even with these adjustments, they suggest that their projections might still be on the conservative side. InvestingPro analysis shows the company maintains a strong financial position with an overall health score of "GREAT" and current revenue of $35.71 billion, supporting its ambitious growth trajectory.
The analysts highlighted GE Vernova’s success in securing over 12 gigawatts (GWs) of new slot reservation agreements since the end of 2025, bringing the total slot reservations to more than 21 GWs. These reservations are expected to contribute to a potential increase in the company’s backlog, which could add over $60 billion in equipment and service backlog to the existing $76 billion.
Looking ahead, the BMO analysts see a strong market for GE Vernova’s products, driven by the expanding scale of data centers. They note the upward trend in data center IT capacity, with current projects averaging 50 megawatts (MWs) and later-stage global projects averaging more than 200 MWs. This growth supports the demand for gas generation and could lead to further capacity expansion, as evidenced by the tripling of combined cycle gas turbine (CCGT) pricing since the end of 2023. For deeper insights into GE Vernova’s growth potential and comprehensive financial analysis, investors can access the detailed Pro Research Report available exclusively on InvestingPro, which covers over 1,400 top US stocks with expert analysis and actionable intelligence.
BMO Capital has also adjusted its valuation base year to 2028, attributing approximately $11 per share of value to GE Vernova’s small modular reactor (SMR) pipeline, which is not yet reflected in the firm’s earnings estimates. This valuation comes in the context of increasing global support for nuclear expansion and the valuation of smaller publicly traded SMR peers ranging from $7.4 to $9.4 billion.
In other recent news, GE Vernova has seen its outlook upgraded to positive by S&P Global Ratings due to rapidly improving profitability. The company’s adjusted EBITDA margins have increased significantly, with expectations to reach 10% over the next 12-24 months. In 2024, GE Vernova’s power business experienced a 2.6% increase in its services backlog, although its equipment backlog declined following the sale of its steam original equipment business. Wells Fargo (NYSE:WFC) has maintained its Overweight rating on GE Vernova, with a price target of $474, noting strong demand for the company’s heavy-duty gas turbine products. JPMorgan also reaffirmed its Overweight rating with a $460 price target, highlighting the potential of GE Vernova’s Electrification segment, which could surpass fiscal year 2025 guidance. Additionally, GE Vernova shareholders have approved executive pay and elected directors during their recent annual meeting. Prolec GE, a joint venture with GE Vernova, announced a $140 million investment to double its transformer output in North Carolina, creating over 330 full-time jobs. This expansion aligns with North America’s electrification goals and supports a more efficient and sustainable electrical grid.
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