On Tuesday, Truist Securities adjusted its outlook for GE Vernova (NYSE:GEV), ahead of the company's investor event scheduled for tomorrow. The firm increased the price target on GE Vernova from $325.00 to $400.00, while maintaining a Buy rating on the stock. According to InvestingPro data, GEV has demonstrated remarkable performance with a 155% return year-to-date, though current analysis suggests the stock is trading above its Fair Value.
The adjustment comes as the analyst anticipates continued strong demand for GEV's gas power and electrification segments, supported by favorable macroeconomic tailwinds. The analyst expects the company to present long-term guidance of high single-digit revenue growth and low-to-mid-teens EBITDA margins at the upcoming event.
With current EBITDA at $1.4 billion and an overall Financial Health score rated as GOOD by InvestingPro, the company appears well-positioned for growth. Additionally, the possibility of a dividend or share repurchase program announcement is on the horizon.
The firm's optimistic stance is based on the revised forecast for GE Vernova's fiscal year 2026 EBITDA, which has been increased to $4.76 billion from the previous $4.62 billion estimate. This is slightly higher than the Street's expectation of $4.73 billion.
The new price target reflects a forward EV/EBITDA multiple of 20 times, an increase from the prior multiple of 16 times and above the peer average of 18 times. Currently, GEV trades at an EV/EBITDA multiple of 58.4x, reflecting high growth expectations. Get access to 13 additional key insights about GEV with InvestingPro, including detailed valuation metrics and growth forecasts.
Truist Securities suggests that any conservative outlook from GEV or a potential sell-off following the investor event could present a buying opportunity for investors. The firm's reiteration of the Buy rating and the raised price target are indicative of its confidence in GE Vernova's performance and market position.
In other recent news, GE Vernova has been a center of attention due to mixed third-quarter earnings, with revenue surpassing expectations but earnings falling short. Despite this, the company reaffirmed its full-year 2024 guidance, projecting revenue to trend towards the higher end of $34-35 billion. This has led to several analyst firms, including TD Cowen, Guggenheim, Wolfe Research, Mizuho (NYSE:MFG) Securities, and RBC Capital Markets, revising their price targets and ratings for the company, reflecting confidence in its growth potential.
TD Cowen initiated coverage on GE Vernova shares with a Buy rating and a $400 price target, highlighting the company's successful turnaround and potential benefit from increased investment in the electricity supply sector. Guggenheim maintained a Buy rating and increased the price target to $400, citing underestimated free cash flow generation. Wolfe Research initiated coverage with an Outperform rating and a $403 price target, emphasizing the company's growth and margin expansion potential.
Mizuho Securities raised its price target to $351, citing potential value in GE Vernova's small nuclear business and zero-carbon turbines. RBC Capital Markets revised its price target from $285 to $376, based on an improved macroeconomic backdrop.
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