Jefferies Raises GE Vernova Price Target to $1,185 After 23% Pullback
Key Takeaways
- •Jefferies lifted its price target on GE Vernova to $1,185 from $1,155 and maintained a Buy rating, helping the stock climb 3.6% to $957.27 on Friday.
- •Before the rebound, GE Vernova shares had fallen more than 23% from their late-June 52-week high of about $1,196, although the stock remains up 42% year to date.
- •Jefferies analyst Julien Dumoulin-Smith said the market undervalues GE Vernova's recurring services revenue, forecasting more than $70 million per gigawatt-year in the 2030s from an installed base of over 400 gigawatts.
- •Approximately 78% of Wall Street analysts rate GE Vernova a Buy with an average price target near $1,240, and Fitch recently raised the company's long-term issuer default rating to A- from BBB+.
- •Jefferies identified upcoming catalysts including third-quarter 2026 results, fiscal-year 2027 guidance expected in January, and comprehensive long-term guidance updates anticipated in March 2027.
Shares of GE Vernova Inc. (NYSE: GEV) rose 3.6% on Friday to close at $957.27 after Jefferies raised its price target for the energy technology company to $1,185 from $1,155. Jefferies analyst Julien Dumoulin-Smith reaffirmed a Buy recommendation.
The move followed a period of significant selling pressure. Before Friday’s session, GE Vernova shares had declined more than 23% from their 52-week high of approximately $1,196, reached during the final days of June.
In a research note, Dumoulin-Smith criticized what he called “peak order myopia.” He argued that investors are focusing too heavily on whether equipment-order growth has reached its maximum while overlooking the longer-term value of GE Vernova’s services business.
GE Vernova reported that equipment orders doubled year over year in the second quarter. Although the increase has drawn considerable attention, Dumoulin-Smith said the emphasis on new equipment bookings has led the market to undervalue the company’s recurring services revenue.
Industrial-scale gas turbines require maintenance, replacement parts, and upgrades throughout their operating lives. Dumoulin-Smith forecasts that GE Vernova could generate more than $70 million per gigawatt-year from its installed base during the 2030s, supported by a fleet of more than 400 gigawatts.
The analyst also said GE Vernova’s earnings profile is less dependent on data center construction cycles than that of competitors whose revenue relies on inventory-sensitive products, including cooling systems and low-voltage distribution equipment.
According to the note, the services business’s scale in 2030 will be only half of its expected size by 2040. Dumoulin-Smith said this extended growth runway is not adequately reflected in current market valuations.
Analyst Consensus and Valuation
Dumoulin-Smith’s view is broadly supported by other analysts covering GEV. Approximately 78% of Wall Street analysts rate the stock Buy, compared with the typical 55% to 60% Buy consensus among S&P 500 companies. The overall analyst price target is near $1,240, above Jefferies’ $1,185 target.
GE Vernova trades at approximately 45 times forward earnings estimates. That is a premium to competitors such as Eaton (ETN) and Schneider Electric, which generally trade at around 30 times earnings. Dumoulin-Smith said the premium is justified by the projected expansion of GE Vernova’s services business.
Fitch Ratings recently raised GE Vernova’s long-term issuer default rating to A- from BBB+. The ratings agency cited expanding EBITDA margins and strong free cash flow generation among the factors supporting the upgrade.
Upcoming Company Developments
Jefferies identified several developments that could influence expectations for GE Vernova in the coming months. One is the potential for the company to exceed earnings expectations and raise guidance when it reports third-quarter 2026 results. Another is the release of fiscal-year 2027 guidance, which is expected in January. The company is also expected to provide comprehensive long-term guidance updates in March 2027.
Jefferies said these milestones could change market expectations for GE Vernova’s mature services earnings potential. The firm’s note said current institutional and analyst forecasts remain below its own projections.
Despite the retreat from its June high, GE Vernova shares are up 42% year to date, according to InvestingPro analytics. BMO Capital maintains an Outperform rating, citing favorable fundamentals for gas turbine demand. Mizuho has set a $949 price target, based on expectations for increased gas turbine production capacity.
Source: Blockonomi
