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Investing.com - Goldman Sachs raised its price target on GE Vernova (NYSE:GEV), a $158 billion market cap electrical equipment giant, to $715.00 from $500.00 while maintaining a Conviction Buy rating, despite recent stock pressure following news about a competitor’s expansion plans. According to InvestingPro data, the company has demonstrated remarkable strength with a 77% year-to-date return.
The stock fell approximately 5.0% last week compared to the XLI index’s 0.7% decline after a September 1 Bloomberg article reported that Mitsubishi Heavy Industries’ CEO announced plans to double gas turbine production capacity within two years, upgrading from a previous target of 30% expansion. This decline comes despite GE Vernova’s strong financial position, with InvestingPro analysis showing the company maintains more cash than debt on its balance sheet.
Goldman Sachs analysts indicated they do not view Mitsubishi’s expansion as a material risk to the industry, noting that MHI and other gas turbine manufacturers continue to face supply chain constraints, particularly with castings and forgings, making near-term expansion plans difficult to execute.
The research firm highlighted that GE Vernova maintains approximately 20GW in annual capacity, similar to Siemens, in a market expected to reach 45-60GW over the next five years, while Mitsubishi’s current and future capacity levels remain unclear.
Goldman Sachs raised its estimates for GE Vernova based on stronger growth and margins in the company’s Power and Electrification segments, and the stock remains on the firm’s Americas Conviction list. With annual revenue of $36.62 billion and EBITDA of $2.42 billion, GE Vernova appears overvalued according to InvestingPro Fair Value calculations. For deeper insights into GE Vernova’s valuation and 15 additional ProTips, explore the comprehensive Pro Research Report available on InvestingPro.
In other recent news, GE Vernova has reported strong operating results, prompting UBS to reiterate its Buy rating with a $614.00 price target. The company achieved 9% organic growth and a 55% incremental margin in its Power segment, leading to a raised full-year guidance. Meanwhile, BMO Capital raised its price target for GE Vernova to $690.00 from $590.00, maintaining an Outperform rating, driven by signals of a tightening power market rather than the company’s earnings beat and guidance update. Additionally, Jefferies maintained its Hold rating but increased its price target to $658.00, citing higher EBITDA estimates for fiscal year 2028 due to a shift towards higher-margin services. In contrast, Guggenheim downgraded GE Vernova from Buy to Neutral, removing its previous $600 price target, as they believe the current stock valuation already reflects above-consensus estimates. BMO Capital also reiterated its Outperform rating, raising its price target to $631.00 based on strong results and order flows. These developments highlight the mixed analyst perspectives on GE Vernova’s future performance.
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