Key Takeaways
- Morgan Stanley kept its Buy rating and $1,350 price target on GE Vernova on Nov. 12. That’s 67% above the stock’s latest close.
- The firm’s case rests on two things: a backlog headed past $200 billion, and the decades of service revenue each gas turbine brings in after it ships.
- The stock is 31% below its June high on fears about data-center spending, but analysts have kept raising their 2027 earnings estimates.
- At $1,350 the stock would trade at about 58x forward earnings, a little above its one-year average, so the call looks right as long as the data-center fears don’t turn into cancellations.
GE Vernova (GEV) is 31% below its June 30 closing high, and Morgan Stanley thinks it can climb back above it. On Nov. 12, analyst David Arcaro kept his Buy rating and $1,350 price target, 67% above the stock’s $808 close on Nov. 11.
The election and SoftBank spooked investors
Democrats won both chambers of Congress on Nov. 3, and Texas elected a governor who pledged to pause new data-center permits. GE Vernova fell 10% the next day.
On Nov. 10, SoftBank, which had reserved turbines from makers including GE Vernova for an Ohio data-center campus, booked a $3.7 billion charge on power equipment and said the Ohio project is undergoing “a thorough reassessment.” No cancellation of a GE Vernova order has been confirmed.
It starts with the backlog
In his September note, Arcaro pointed first to a backlog that management expects to top $200 billion, which he reads as demand and pricing power lasting well into the next decade. GE Vernova ended September at $197 billion.
Then there’s the service work. CEO Scott Strazik said on the third-quarter call that “we expect every gigawatt of HAs to generate $0.5 billion of high-margin services revenue over the first 20 years of its lifetime.” Higher-priced equipment started shipping in the third quarter, and Power’s segment EBITDA margin jumped to 21.4%, from 13.4% a year earlier.
TIKR tracks 38 analysts on GE Vernova. How many say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on GE Vernova, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See GE Vernova’s Analyst Ratings
Does $1,350 add up?
The consensus target from the 38 analysts covering the stock has climbed from $679 a year ago to $1,178:
Morgan Stanley’s $1,350 is 15% above that, near the top of a range that runs from $940 to $1,400.
Analysts expect earnings to climb steeply from here:
And they’ve raised their 2027 estimate over the past month, right through the selloff. (2025’s $16.67 includes a $2.9 billion tax benefit.)
GE Vernova trades at 35x forward earnings, against a 54x average over the past year:
Divide $1,350 by the $23.18 a share analysts expect over the next twelve months, and the target works out to about 58x. That’s above the average, but well short of the 70x the stock traded at in April.
I’d side with Morgan Stanley
The main risk is data centers, which make up about 20% of GE Vernova’s gas demand, management says.
Still, Morgan Stanley’s call looks right to me. Its target needs a multiple only a little above the stock’s average of the past year, on estimates that are still rising.
The next test is the fourth-quarter report in late January, which will show whether SoftBank’s reassessment cost GE Vernova any of its gas contracts.
So what is GE Vernova stock actually worth?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
