Key Takeaways
- Vertiv shares fell nearly 14% in the past week (through Monday’s close), and Bloom Energy fell about as much, while the S&P 500 lost 1.5%.
- Vertiv reported nothing negative, and the selling followed a scare over how the AI build-out gets financed after CoreWeave’s 2032 bonds yielded close to 15%.
- After the drop, Vertiv trades at 26x forward earnings, about its 5-year average, while Morgan Stanley’s $330 target sits about 60% above Monday’s close.
- Vertiv reports third-quarter results on Oct. 28, against guidance of $898 million to $938 million of adjusted operating profit.
Vertiv (VRT) stock lost 13.9% in the past week to about $206, as a scare over how the AI build-out gets financed spread from CoreWeave’s bonds to data center suppliers.
Bloom Energy (BE), which sells fuel-cell power to data centers, fell 13.8%, while the S&P 500 slipped just 1.5%. Vertiv stock now sits 46% below its May high.
And Morgan Stanley sees 60% upside from here.
It started in CoreWeave’s bonds
Vertiv announced its earnings date and a deployment guide on Wednesday, Oct. 14, the stock’s worst day of the week (down 6.1%). Before the open, RBC Capital cut its target to $323 from $337, keeping its Outperform rating.
That same day, CoreWeave (CRWV) stock sank 15.5% as yields on its bonds due in 2032 climbed close to 15%. Vertiv’s orders depend on the companies building data centers being able to pay for them.
A hotter-than-expected inflation report that morning added to worries about borrowing costs, and the selling ran on through Thursday and Friday (down 3.6% and 3.9%).
The analysts trimmed, but kept their Buys
Mizuho followed on Thursday, cutting its target to $280 from $300 and keeping its Outperform rating. Morgan Stanley trimmed to $330 from $350 on Friday, keeping its Overweight.
The consensus target has fallen far less than the stock, to $334 from a high of $381 in July…
Is Vertiv a buy after the drop?
The sell-off has taken Vertiv back to 26x forward earnings, right around its 5-year average of 26.6x and less than half its May peak of 55.1x…
And analysts still expect normalized EPS to more than double, from $4.20 in 2025 to $9.19 in 2027:
Morgan Stanley’s $330 works out to about 36x that 2027 estimate, against about 22x at today’s price.
The test comes on Oct. 28, when Vertiv reports third-quarter results before the open. Management guided to $898 million to $938 million of adjusted operating profit, but orders and backlog will show whether customers keep buying as funding gets pricier.
Back near its five-year average multiple, with its guidance untouched, Vertiv looks like a buy to me. Reaching $330 will take estimates that hold up and a richer multiple, though.
If CoreWeave’s borrowing costs keep climbing, Vertiv and Bloom Energy could have further to fall.
Want to see how far Vertiv’s targets and earnings estimates have moved? The same consensus target history, forward P/E and EPS estimates are free to pull up on TIKR. Learn more here.
So what is Vertiv 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!
