GE Vernova Price Target (GEV) – New Bullish Coverage, But What is To Come?

GE Vernova Inc. (GEV), the energy equipment manufacturing and services powerhouse, has seen it's stock price soar since the spin-off, adding 253% in a little over 15 months on the market.

The bullish sentiment surrounding GEV is further fueled by recent analyst coverage. GLJ Research analyst Austin Wang initiated coverage of GE Vernova with a Buy rating and a very lofty $702 price target.

The firm says investors and analysts are increasingly stepping away from GE Vernova, a “best-in-class” power generation manufacturing story, citing valuation and a slowing event-path. GLJ believes analysts are mismodeling the most significant part of the company's narrative – the services business. It expects accelerating Power Services trends with pricing gains.

Firms like Susquehanna Financial initiated coverage with a “Positive” rating and a $370 price target back in April, projecting substantial revenue and EBITDA growth driven by strong gas turbine sales. However, given that GEV stock has surged past this initial price target, new analysis is needed to determine a more accurate valuation.

Other firms, including CICC Research and Robert W. Baird, have also assigned “Outperform” ratings with price targets around the $440-$448 range, further validating the company's growth potential.

Barclays raised their price target earlier this month to $550 (from $500), whilst BMO Capital ($522 from $381) and BofA ($550 from $520) have also raised in recent weeks.

However, not all analysts are exuberantly bullish. Jefferies downgraded the stock to Hold, from Buy, citing the premium already built into their earlier estimates. The price target was raised at the same time, to $517 from $427, highlighting what they see as strong long-term fundamentals.

A key factor in GEV's future success lies in its ability to capitalize on the growing demand for reliable and sustainable energy solutions. As the world transitions towards cleaner energy sources, GE Vernova's expertise in power generation, electrification, and software positions it favorably to capture significant market share.

The average price target on the street now sits below the current price, despite the favourable commentary when coverage came through. The pace of ascent in GEV has clearly surpassed what many thought was possible at the time, with raises coming through thick and fast. Whilst the commentary is bullish, there remain questions about the premium being paid for the quality.