Deutsche Bank says buy GE Vernova, sees 30% potential upside

Things are looking up for GE Vernova , according to Deutsche Bank. The firm initiated its coverage of the energy company with a buy rating and $354 price target, implying upside of nearly 30%. Shares of GE Vernova have surged 95% since the company was spun off from General Electric in April. Analysts are generally bullish the stock, with the majority of those covering the name rating it either as a strong buy or buy. GEV YTD mountain GEV YTD chart As a catalyst, analyst Nicole DeBlase cited a strong outlook in investments towards power generating assets. “This can be attributed to increasing electricity consumption due to: the electrification of all things, proliferation of AI data centers globally, decarbonization, and aging existing grid infrastructure,” she wrote. “We believe the forthcoming power investment cycle will enable GEV to deliver best-in-class revenue and earnings growth vs. the rest of our coverage universe.” DeBlase also sees a “very favorable” mix of revenue and margin expansion dynamics in GE Vernova’s electrification business. In the long term, the company’s wind turbine business will also capitalize on the industry’s growth potential, with wind expected to generate 25% of the world’s electricity by 2040 versus just 7% today, the analyst said. Additionally, the analyst pointed out that GE Vernova’s gas power business is increasingly turning into a growth story. The analyst sees rooms for revenues and margins to expand. “Gas turbine orders have picked up in recent quarters, as increasing electricity consumption pressures existing grid infrastructure, requiring more baseload capacity. In response, GEV is increasing its HDGT manufacturing capacity, from 55 to 70-80 units/year by 2026,” she wrote. “And as HDGT orders are booked, this also drives increasing service orders/backlog; services growth is also being fueled by greater focus on the customer and increasing demand for upgrades.”