GE Vernova stock has rallied more than 30% since the beginning of August and analysts believe the General Electric spinoff could go even higher. GEV shares advanced Monday.
On Friday, Jefferies analyst Julien Dumoulin-Smith raised the firm's price target on GE Vernova to 293, up from 261, while maintaining a buy rating on the stock. That represents nearly 20% upside compared to GEV stock's current trading level.
Dumoulin-Smith wrote that there is growth opportunity through at least 2027 for the company's power and electrification segments. Meanwhile, Morgan Stanley analysts on Monday wrote that GE Vernova is among the companies that could benefit as hyperscalers — the largest cloud, data center and AI operators — look to diversify the ways in which they power data centers, with the market "underappreciating the natural gas option."
Analysts Stephen Byrd and David Arcaro believe GE Vernova, with its natural gas power generation equipment segment, along with Siemens and Bloom Energy, are among the stocks that could benefit from surging AI demand for electricity.
Morgan Stanley has a price target on GEV of 256, representing 4% upside from current levels.
Last week, Bank of America analyst Andrew Obin upgraded GE Vernova to buy from a neutral rating with a price target of 300, up from 200. Obin wrote that rising grid-related spending is a "well-known tail wind" for the electrification segment but that the gas power services story is "less appreciated by investors."
On Friday, Bloomberg reported that GE Vernova planned a transformation of its struggling offshore wind business. The revisions, aimed at creating a leaner, more profitable operation, could include the layoff of 900 workers.
Meanwhile, Barclays initiated coverage of GE Vernova on Sept. 16 with an overweight rating and a 250 price target.
Stock Performance: GE Vernova
GE Vernova gained 2.5% to 251.53 during market trading on Monday. GEV shares closed on Friday at 245.46. The stock broke out of a seven-week base in mid-August. Shares are up 32% from that breakout.
Meanwhile, the 56 stocks in the IBD tracked Energy-Alternative/Other industry group have collectively gained more than 27% in 2024, according to MarketSurge.
GE Vernova emerged from General Electric's big, long-term breakup earlier this year, with spinouts of GE Aerospace and GE HealthCare Technologies. GE Aerospace kept the GE ticker symbol.
Before the spinouts, General Electric shed a number of assets and operations over a series of years, from lighting to locomotives. In November 2017, GE began signaling the breakup process amid financial troubles.
GE Vernova reports third-quarter earnings and revenue in late October. The company will also be hosting an investor conference on Dec. 10. Analysts expect Q3 earnings of 37 cents per share with revenue totaling $8.82 billion.
GEV has already announced it expects a Q3 $300 million EBITDA loss from its wind energy business. In March, GE Vernova announced it is targeting 10% EBITDA by 2028.
The company is also expecting on the back of strong demand for grid equipment that its electrification backlog will triple to around $18 billion by the end of 2024.
GE Vernova stock has an 89 Composite Rating out of a best-possible 99. The tock also has a 96 Relative Strength Rating and a 70 EPS Rating.
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