Key Takeaways
- GE Vernova shares rose Tuesday for the seventh straight session as Barclay analysts said the company is a “likely benefactor” with increasing global electricity demand, particularly from data centers.
- After spinning off from GE Aerospace in early April, GE Vernova has risen 68%.
- Analysts said the company’s stock is undervalued compared to multi-industry peers, while GE Vernova is in a better position than those same competitors.
GE Vernova (GEV) stock rose for the seventh consecutive session Tuesday as analysts at Barclays said the company is a “likely benefactor” of increasing demand for electricity in the U.S. and worldwide.
Barclays analysts initiated their coverage of the former General Electric division with an “overweight” rating and price target of $250. Bank of America analysts upgraded GE Vernova to a “buy” rating, lifting their price target to $300 from a previous price of $200.
GE Vernova Seen Benefiting From Increased Power Demands
Barclays and Bank of America join a string of positive comments from analysts since GE Vernova split from GE Aerospace (GE) in early April, completing the larger breakup of the General Electric conglomerate into three standalone companies, which also includes GE HealthCare (GEHC). They cite the increasing demand for electricity in the U.S. and globally, putting GE Vernova in an advantageous position.
Barclays analysts believe GE Vernova’s stock is undervalued compared to its multi-industry peers. They also highlight that the company has greater exposure to the gas and electrification sectors, which are poised for growth as demand for data centers and electric vehicle (EV) charging infrastructure rises in the coming years. They added that winding down its offshore wind business and becoming profitable overall should allow GE Vernova to focus on gaining market share in its other segments.
The Bank of America analysts said that GE Vernova’s stated plans to ramp up higher-capacity gas turbine production suggest higher demand for the turbines, a positive sign. While its orders could be a lower priority for parts of the supply chain that also fulfill orders from aerospace companies, the analysts said that limited supply could give GE Vernova a chance to charge higher prices for the turbines.
Analysts Highlight Upcoming Catalysts
Both groups of analysts identified several upcoming catalysts for GE Vernova stock, including potentially beating estimates and raising its outlook in coming quarters. They also cite a Dec. 10 investor event where the company could announce stock buybacks or dividends for its excess cash.
GE Vernova shares recently were up nearly 4% to $238.54, and are 68% higher since being spun off on April 2.