GE Vernova (GEV) shares are trading lower on Thursday despite receiving a positive outlook from Truist Securities. Analyst Jordan Levy initiated coverage on the company with a Buy rating and a price target of $300, highlighting GEV’s unique position to capitalize on the energy transition. Levy believes GEV is well-positioned to benefit from the increasing demand for electrification and hydrogen technologies, which are key drivers of the shift to cleaner energy sources.
Levy anticipates further upside for GEV as the company accelerates growth and expands its margins. This growth, according to the analyst, will be fueled by significant changes in U.S. power demand. He believes GEV is in the early stages of a growth inflection that will significantly enhance shareholder value through future buybacks, dividends, and exceptional M&A opportunities. He estimates free cash flow to approach $2.5 billion by 2026.
GEV is leveraging its strong position in the electrification segment by focusing on higher-margin, supply-constrained markets in the U.S. Levy forecasts an EBITDA of $4.6 billion for 2026, surpassing current estimates by 6%. He anticipates both the power and electrification segments to achieve mid-teens EBITDA margins by the end of 2026.
Looking ahead, Levy projects a doubling of topline revenue and a 400 basis point increase in EBITDA margins for the electrification segment over the next two years, with long-term margins potentially reaching 20%. GEV is expanding capacity for its heavy-duty turbines in response to strong demand signals.
For the power segment, Levy projects 2026 revenues and EBITDA to reach $20 billion and $3 billion, respectively, exceeding Street estimates of $19.6 billion and $2.7 billion. In a separate development, GE Vernova announced that it has been selected by the U.S. Department of Energy’s Hydrogen and Fuel Cell Technologies Office (HFTO) to lead award negotiations for a project aimed at improving permitting and safety for hydrogen deployment. This project underscores GEV’s commitment to advancing hydrogen technology, a crucial element of the energy transition.
Investors interested in gaining exposure to GEV can consider the Invesco S&P Spin-Off ETF (CSD) and the Fidelity Clean Energy ETF (FRNW). At the last check on Thursday, GEV shares were down 1.38% at $251.54.
