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GE Vernova (NYSE:GEV) -2.2% in Monday trading despite earning a new Buy rating and $154 price target from Mizuho Securities, which expects the company to approach a 10% adjusted EBITDA margin by 2026, much earlier than forecast for the fiscal year 2028.
Mizuho analyst Maheep Mandloi says he favors the GE spin-off because it “benefits from leadership in the gas power business that generates recurring and growing cash flows, margin expansion in wind due to pricing power and an unprofitable offshore backlog that will end by 2026, and its strong presence in the services and electrification network.”
GE Vernova’s (GEV) overall EBITDA margin in 2023 was approximately 2%, and the gas turbine business is the company’s most profitable unit, with an EBITDA margin of approximately 10% in 2023, while the wind business – which is suffering for everyone – generated a 2023 EBITDA margin of negative 11%.
Mandloi’s $154 stock PT is about 14 times its estimate for EBITDA/share in 2025 and compares with about 13% of the S&P 500 for the same year, and the analyst says GE Vernova (GEV) deserves a premium because margins continue to rise.
GE Vernova (GEV) began trading on the NYSE on April 2 and most analyzes have been favorable.