GE Vernova: Solid 2Q Orders, Capacity Expansion Supported by Increasing Visibility; Establishing YE27 PT of $1,330

Research evidence excerpt

GE Vernova: Solid 2Q Orders, Capacity Expansion Supported by Increasing Visibility; Establishing YE27 PT of $1,330

nd is accelerating with visibility building into 2031. We are establishing a Q2 770 1,250A 2,524

YE27 price target of $1,330, up from our prior YE26 target of $1,302. We maintain Q3 811 1,792 2,499

Q4 1,158 2,519 3,146

our Overweight rating and view yesterday’s pullback, we believe induced by some FY 3,195 6,456 10,274

investor concern regarding the capacity expansion, as a buying opportunity.

Style Exposure

• Strong 2Q revenue and orders, slight EBITDA miss. GEV reported 2Q

revenue of $11.1bn, ~3% above our expectations, though PF EBITDA of

$1.25bn came in ~1% below JPMe, largely due to Wind equipment losses and

corporate expenses. Total 2Q orders were $24.2bn and imply a book-to-bill of

~2.2x. 2Q FCF was $5.1bn, well above expectations (JPMe $1.0bn, Street:

$1.3bn), driven primarily by customer downpayments on record order activity.

• Power Orders Surge; 30 GW capacity target for 2030. GEV signed ~20 GW

of new gas contracts in the quarter and raised the YE26 gas power backlog

+SRA target to at least 125 GW, up from at least 110 GW previously, the second

consecutive raise this year, which we view as a strong signal that customer

demand is not abating. We note particularly strong aeroderivative orders of 61

units, driven by both traditional and data center end markets. The company also

announced a 2030 annual gas power output target of 30 GW and noted this

figure remains achievable within the existing factory footprint through lean

and incremental machinery, with investment largely concentrated at

Greenville for HA and F-class units. GEV believes that gas power supply/

demand dynamics are still favorable despite increased industry capacity