Industrials/Multi-Industry: DEM #677: Industrial data and valuation

研报英文原文证据摘录

Industrials/Multi-Industry: DEM #677: Industrial data and valuation

GE Vernova (GEV)

We base our $1,310 price objective on a 40x EV/EBITDA multiple of our 2027E adjusted

EBITDA estimate. Our target multiple is a premium to the 19x peer average on 2026

estimates. We argue that a premium multiple is warranted given above-peer earnings

growth and margin trajectory.

Risks to our price objective are 1) changes to government incentives for wind turbines,

2) execution risks on targeted $500mn cost-out by 2028, 3) secular decline in natural

gas turbine demand, and 4) cost overruns on services & equipment contracts.

Honeywell International Inc. (HON)

We base our $205 PO on 14x 2027E EV/EBITDA. This is at a discount to peers trading at

19x 2026E. We argue a discounted valuation is warranted given a lack of visibility on

earnings growth acceleration.

Downside risks to our price objective are 1) HON overpays for deals or struggles to

integrate acquisitions, 2) lack of re-acceleration in short-cycle end markets pressures

organic growth.

Upside risks to our price objective are 1) HON spin occurs earlier than planned, 2)

investors reward further portfolio simplification (e.g., sale of the Productivity Solutions

& Services or Warehouse & Workflow Solutions businesses).

Illinois Tool Works (ITW)

We base our $300 price objective on 18x 2027E EV/EBITDA. This compares to the peer

average at 19x 2026E. Our multiple reflects more auto/consumer exposure offset by

strong execution.

Upside risks to our PO are 1) Auto production volumes revised upward, driving better

near-term margin expansion and topline, 2) recovery in consumer and residential

markets. Downside risks are: 1) Auto volumes remain depressed, limiting near-term

margin expansion, 2) cyclical recovery delayed in Welding and T&M&E.