We’re raising our GE Vernova price target as shares deservedly hit all-time highs
GE Vernova shares rightfully soared to all-time highs on Wednesday after the energy equipment giant offered incredibly positive guidance through fiscal 2028. CEO Scott Strazik on CNBC reinforced the incredible near-term and long-term growth story management outlined at Tuesday night’s investor meeting. “We’re going to have a lot of margin expansion over the next decade,” Strazik told Jim Cramer in a “Squawk on the Street” interview. He added: “It’s a healthy mix of price, volume and productivity. …We [also] investing in robotics and artificial intelligence and seeing a lot of productivity [increases]. In addition to margin expansion, Strazik highlighted the company’s expectation to increase its total backlog from $135 billion to more than $200 billion by the end of fiscal 2028. He said he thinks the world’s largest technology companies, which are among his customers, will be able to meet their massive AI capital spending commitments. “Our goal is much bigger than our 2028 financial statements,” Strazik said at the event held on Tuesday evening. he said. The indicator for natural gas turbines in high demand to provide additional energy for AI data centers offered some positive updates for fiscal 2025 and set a high bar for 2026. GE Vernova said fiscal 2025 revenue is on track for the $36 billion or $37 billion cap that forecasts call for. The company also reaffirmed its fiscal 2025 adjusted EBITDA margin expectation of 8% to 9%, but announced a large increase in its free cash flow outlook to $3 billion to $3.5 billion. This translates to earnings before interest, taxes, depreciation and amortization, a key profitability metric for GE Vernova’s fiscal 2026. He also set his revenue expectation between 41 billion and 42 billion dollars. At the midpoint, this was slightly below estimates of $41.59 billion. The company projects an adjusted EBITDA margin of 11% to 13% compared to forecasts. The $4.5 billion to $5 billion free cash flow outlook crushed estimates of $3.3 billion. In its long-term forecast for fiscal 2028, GE Vernova raised its revenue expectations to $52 billion from the previous estimate of $45 billion; It adjusted its EBITDA margin from 14% to 20% and its cumulative free cash flow from 2025 to 2028 GEV ALL mountain GE Vernova since April 2024 said it was absolutely “surprised.” “This is probably the most bullish story I’ve seen in years,” he added, based on management’s numbers. The Club shares are up more than 350% since it was spun off from GE in April 2024. Shares have more than doubled this year alone. We raise our GE Vernova price target to $800 from $700 and reiterate our buy equivalent 1 rating. It’s not our style to jump in when the stock is on the rise (Jim Cramer’s Charitable Trust is a long GEV. See here for a full list of stocks.) When you subscribe to the CNBC Investment Club with Jim Cramer, after sending a trade alert, Jim waits 45 minutes and talks about a stock in his charitable trust’s portfolio. CNBC TV waits 72 hours after providing transaction alert before executing the transaction. THE ABOVE INVESTMENT CLUB INFORMATION, TOGETHER WITH THE DISCLAIMERS OF LIABILITY, IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY OR DOES NOT EXIST ANY OBLIGATIONS OR DUTIES OF CONFIDENTIALITY. THE INFORMATION PROVIDED IN CONNECTION WITH THE INVESTMENT CLUB DOES NOT GUARANTEE A PARTICULAR RESULT OR PROFIT.
![‘How on earth can I trust [them]?’](https://wp.fifu.app/cashwinner.info/aHR0cHM6Ly9zLnlpbWcuY29tL255L2FwaS9yZXMvMS4yL3JRWlNVaDdwcWttdWZqdlBmU19hbGctLS9ZWEJ3YVdROWFHbG5hR3hoYm1SbGNqdDNQVEV5TURBN2FEMDJPRFEtL2h0dHBzOi8vbWVkaWEuemVuZnMuY29tL2VuL3RoZV9jb29sX2Rvd25fNzM3LzM2MTU2OWNlMzYwNmE2MjI5OTAzZWY1NWIzMzQ0ZGFm/ecfed9ea812f/how-on-earth-can-i-trust-them.webp?w=390&h=220&c=1&p=229741 "‘How on earth can I trust [them]?’")
