Morningstar

GE Vernova Earnings: Shares Rise on Further Upside to Long-Term Financial Targets

We’ve raised our fair value estimate of GE Vernova stock, though we think it remains overvalued.

GE Aerospace logo on blue background
Image courtesy of GE Vernova
Securities in This Article
GE Vernova Inc
(GEV)

Key Morningstar Metrics for GE Vernova

What We Thought of GE Vernova’s Earnings

GE Vernova GEV reported quarterly revenue of $9.1 billion (up 11% year on year) and EBITDA margin of 8.5%. The company also raised its full-year guidance for revenue, EBITDA, and free cash flow.

Why it matters: Order trends remained favorable in the second quarter, as power and electrification segments remain in an upcycle, while wind activity was subdued.

  • Gas power backlog and slot reservation agreements increased sequentially to 55 gigawatts, up from 50 gigawatts last quarter. Orders and SRAs are expected to outpace shipments in the back half of 2025, with ending backlog and SRAs expected to exceed 60 gigawatts, or three years of annual shipment volume once its capacity expansion is complete in the second half of 2026.

The bottom line: We are increasing our fair value estimate for narrow-moat GE Vernova to $390 per share from $320 because of higher long-term revenue and margin expectations within its power and electrification segments.

  • GE Vernova remains well-positioned to capitalize on growing electricity demand, but we think its current valuation adequately reflects future revenue growth and margin expansion. We view shares as overvalued following the sharp rally in recent months.
  • We believe our revised estimates are in line with or above consensus through 2028. Rather, the bulk of our valuation difference versus the market price is likely attributable to the implied multiple beyond 2029, where we expect the pace of margin expansion to slow considerably.

Coming up: Based on continued strength in gas power and electrification orders we expect the company to revise higher its long-term margin expectations for both segments at year-end.

  • We now see 2028 power and electrification margins of 18.5% and 18.0%, respectively, compared with prior guidance of 16.0% for both segments.

Editor’s Note: This analysis was originally published as a stock note by Morningstar Equity Research.

This article was generated with the help of automation and reviewed by Morningstar editors. Learn more about Morningstar’s use of automation.

The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.

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