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Investing.com - Citi has raised its price target on GE Vernova (NYSE:GEV) to $670.00 from $544.00 while maintaining a Neutral rating following the company’s second-quarter 2025 earnings results. The company, currently valued at $171 billion, appears overvalued according to InvestingPro analysis.
GE Vernova shares outperformed significantly, rising 14.6% compared to the S&P 500’s 0.8% gain after the company reported its quarterly performance. The stock movement came despite what Citi characterized as "relatively modest upside" to GE Vernova’s 2025 outlook.
The company made a substantial increase to its expected 2025 free cash flow guidance, raising it to $3.0 billion-$3.5 billion from the previous range of $2.0-$2.5 billion. This improvement in cash flow projections contributed to the positive market reaction. InvestingPro data shows the company maintains strong financial health with an impressive Piotroski Score of 7 and holds more cash than debt on its balance sheet.
Citi noted that GE Vernova plans to update its EBITDA margin expectations for Power and Electrification at year-end 2025, likely raising them from the current target of 16% by 2028. The firm suggested investors are increasingly focused on GE Vernova’s potential for sustained outsized revenue growth and significant profitability improvements in coming years. Discover 18 additional key insights about GE Vernova with an InvestingPro subscription, including detailed valuation metrics and growth indicators.
Despite acknowledging positive growth prospects, Citi maintained its Neutral stance on GE Vernova, stating that the current valuation increasingly reflects positive outcomes, resulting in what the firm views as a balanced risk/reward profile. The stock currently trades at significant premiums across various metrics, with a P/E ratio of 132.4 and an EV/EBITDA multiple of 68x.
In other recent news, GE Vernova reported its second-quarter earnings for 2025, showcasing a significant rise in both revenue and earnings per share (EPS). The company achieved an EPS of $1.86, surpassing analyst expectations of $1.50, and reported revenue of $12.4 billion, exceeding the anticipated $8.8 billion. This strong financial performance reflects positively on GE Vernova’s strategic direction. Following these results, Jefferies raised its price target for GE Vernova to $620, maintaining a Hold rating. Similarly, BofA Securities increased its price target to $725, citing improved pricing conditions in the Gas Power services segment, while maintaining a Buy rating. Wolfe Research reiterated its Peerperform rating, emphasizing GE Vernova’s strong position in the energy transition sector. These developments highlight GE Vernova’s potential for growth in key areas such as Gas, Onshore Wind, and Transmission & Distribution equipment and services.
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