Key Takeaways
- Vertiv’s stock is still 35% below its May high, even after third-quarter sales rose 61% and management raised its full-year guidance.
- Bernstein kept its Outperform rating on Oct. 29 and raised its price target to $376 from $368, about 53% above the Oct. 29 close.
- That target implies 41x forward earnings, well above Vertiv’s five-year average of 27x, while analysts’ 2027 EPS estimate keeps rising.
- The Street’s $335 average target looks like the more realistic landing spot, and the fourth-quarter report in February is the next test.
Vertiv (VRT) just posted a blowout third quarter, yet the stock is still 35% below its May high.
Bernstein thinks that gap closes. On Thursday, it kept its Outperform rating and raised its price target to $376 from $368. That’s about 53% above Thursday’s close.
Three hits since May
The slide began with the second-quarter report on July 29. Sales of $3.27 billion missed the $3.35 billion midpoint of its guidance. Management put the gap down to timing shifts on large projects. Bernstein cut its target to $368 from $416, citing the miss and supply concerns.
Through the third quarter, questions about quality piled up. On Wednesday’s call, Melius Research’s Scott Davis described chatter about compressors burning out and UPS systems overheating.
In October, worries about how AI data centers get paid for hit the whole group. CoreWeave’s 2032 bonds neared a 15% yield.
Then came Wednesday
Third-quarter sales rose 61% to $4.31 billion against the $3.76 billion analysts expected. Organic orders more than doubled, and adjusted EPS rose 78% to $2.21. Full-year guidance rose to $14.65 billion of sales and $7.15 of adjusted EPS at the midpoints. The stock jumped 16% that day.
Executive Chairman Dave Cote opened the call with a nod to Mark Twain: “the rumors of our demise have been greatly exaggerated.”
Bernstein never wavered. Even while cutting its target in July, the firm wrote, “we still think VRT is a great company and a great stock.” It just didn’t expect the shares to return to their peak multiples.
TIKR tracks 30 analysts on Vertiv. How many say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on Vertiv, 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 Vertiv’s Analyst Ratings
Does $376 add up?
Bernstein sits near the top of the Street. Thirty analysts cover Vertiv, with targets from $250 to $427. Their average of about $335 sits 36% above Thursday’s close. That average has slid from $381 in mid-July…
And the earnings behind those targets?
Analysts see EPS nearly tripling from 2025 to $12.11 by 2028. Their 2027 estimate has climbed to $9.45, up from $9.17 at the end of September.
The multiple is the sticking point. Vertiv now trades at about 27x forward earnings, right at its five-year average and half its 55x May peak:
Bernstein’s $376 over the $9.22 a share analysts expect over the next 12 months comes to 41x. That’s well above the five-year average, and even above the past year’s 39x average, though short of May’s peak.
The average looks like the better bet
The risk is visibility. Vertiv will stop sharing orders data, so investors will have less to go on if demand cools.
My take: the quarter answered the worries that sank Vertiv. With estimates rising, a rebound toward the $335 consensus has solid support. But $376 within a year needs investors to pay well above Vertiv’s usual multiple again. I wouldn’t bank on it.
Vertiv’s fourth-quarter report in February brings its first 2027 guidance. It will show whether earnings can grow fast enough to close that gap.
So what is Vertiv stock actually worth?
TIKR lets you forecast the future price of any stock in less than a minute. Just enter a few assumptions into TIKR’s valuation model and see what Vertiv could be worth. Start from Wall Street consensus estimates, or adjust the inputs to reflect your own view of the business. It’s free to use.
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!
