GE Vernova Co., Ltd. (NYSE:GEV) stock is down today. Mizuho Analyst Maheep Mandroi has initiated coverage with a buy rating and a price target of $154.
Analysts say GE Vernova will benefit from leadership in gas power business (generating and increasing recurring cash flows), margin growth in wind business (due to pricing power), and unprofitable offshore order backlog to close by 2026. The company said it benefits from a strong presence in the power grid. Services and electrification.
In particular, Mandroi expects EBITDA for the power business to be approximately $2 billion in 2024 (approximately 93% of group EBITDA), supported by growth in services (75% of power revenue), and a CAGR of 8% from 2024 to 2026. It is estimated that this will increase.
Analysts see potential options for turbines that use hybrid or zero-carbon fuels.
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Additionally, analysts predict that wind EBITDA will grow from negative $200 million in 2024 to as much as $1 billion in 2026.
Separately, Mandroi expects GEV’s electrification revenue to grow at a CAGR of 11% from 2023 to 2026, with segment EBITDA reaching $500 million in 2026.
Additionally, analysts predict that AI/data center demand could increase demand in the U.S. gas and wind segments by 5%-10% and 10%-15%, respectively, by 2030.
Overall, analysts expect the company to achieve an adjusted EBITDA margin of 10% by 2026 (1.7% in 2023), much earlier than the 2028 outlook.
Early this month, ge aerospace (NYSE:GE) announced that it has officially launched as an independent public company following the completion of the spin-off of GE Vernova.
price action:GEV stock fell 2.13% to $131.14 at last check on Monday.
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