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Investing.com - BMO Capital raised its price target on GE Vernova (NYSE:GEV) to $590.00 from $522.00 on Tuesday, while maintaining an Outperform rating on the stock. The stock, currently trading at $534, has shown remarkable strength with a 204% return over the past year, according to InvestingPro data.
The firm’s updated analysis focused on GE Vernova’s Gas Power business, highlighting what it sees as attractive, contracted earnings growth beyond 2030 from increasing gas power service revenues through growth in long-term service agreements (LTSAs).
BMO Capital’s analysis suggests that by 2035, GE Vernova will generate approximately 2.5 times the annual LTSA revenue compared to 2024 levels, with nearly 1000 basis points higher gross margins.
The firm acknowledged that after GE Vernova’s recent stock price surge of 85% over the last three months, near-term valuation metrics may appear stretched at 28 times BMO’s estimated 2026 EBITDA.
BMO Capital remains constructive on GE Vernova, noting that while investors recognize that current gas turbine equipment orders should drive earnings growth from 2028 onward, the market has not sufficiently appreciated the magnitude of upside potential from gas power service long-term service agreements.
In other recent news, GE Vernova has been the focus of several significant developments. UBS initiated coverage on GE Vernova with a Buy rating, citing the company’s substantial 35% share in the global gas turbine market and projecting a 70% compounded earnings growth over the next five years, driven by increased electricity demand from AI and data centers. Meanwhile, GE Vernova is reportedly exploring the sale of its Proficy industrial software business, with potential valuations reaching up to $1 billion, though the process remains in preliminary stages. BofA Securities raised its price target for GE Vernova to $550, reflecting higher revenue estimates for its Power segment, projecting a 25% revenue compound annual growth rate from 2024 to 2028.
BMO Capital Markets also increased its price target for GE Vernova to $522, highlighting the company’s success in securing over 12 gigawatts of new slot reservation agreements since the end of 2025. S&P Global Ratings upgraded GE Vernova’s outlook to positive from stable, citing rapidly improving profitability, with adjusted EBITDA margins increasing to approximately 6.4%. The company has also initiated a quarterly dividend and a $6 billion share repurchase authorization. Despite these initiatives, S&P Global Ratings anticipates GE Vernova to manage its balance sheet prudently as it continues to improve profitability.
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