Al Root
GE Vernova stock was rising early Thursday after the power technology company picked up a new bullish rating from Wall Street.
Baird analyst Ben Kallo launched coverage of the company with a Buy rating and a $448 price target for shares.
It's "been doing power since before it was cool," wrote Kallo in a Wednesday evening report.
GE Vernova -- which was spun out of GE in April 2024 -- has been involved in electricity generation for more than a century. Electricity demand growth in the U.S. stagnated in recent years amid improving efficiency, but electric vehicles and AI data centers have changed the landscape, boosting demand growth and making the sector cool again.
"GE Vernova is at the center of the increasing need for energy and grid infrastructure," added Kallo. "The rising demand for energy generation solutions gives the company pricing power for out years, which we believe will translate to margin expansion...and exposure to both gas and electric power make GE Vernova an attractive investment for investors looking to play the rise in data centers/AI theme."
GE Vernova stock was up 0.8% in premarket trading at $372.50, while S&P 500 and Dow Jones Industrial Average futures were flat.
Overall, 72% of analysts covering the company rate shares Buy. The average Buy-rating ratio for stocks in the S&P 500 is about 55%. The average analyst price target for GE Vernova shares is about $424.
Kallo's $448 target price works out to about 37 times his estimated 2026 earnings per share (EPS) of $11.98. The current Wall Street consensus for 2026 EPS is $10.90, up from expected EPS of $6.63 in 2025.
The consensus number and average price target value Vernova stock at about 39 times estimated 2026 earnings.
Kallo and his peers agree GE Vernova's outlook deserves a big valuation multiple -- the S&P 500 trades for about 20 times estimated 2026 earnings -- Kallo just sees things getting better faster than most.
Write to Al Root at allen.root@dowjones.com
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February 13, 2025 08:10 ET (13:10 GMT)
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