GEV: Capacity May Overhang, But Probably Not This Side of 2032

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GEV: Capacity May Overhang, But Probably Not This Side of 2032

isions and further multiple

Target Price $1,280 expansion.

Stronger for Longer Gas Market: Demand for GTs could remain in the ~80GW

Base Case range through the end of the decade, driven in part by hyperscale DC power

Organic Growth (CAGR: '24-'27) 11% demand.

Cycle Duration: GEV is pointing to $200bn of backlog by 2027 (vs. $163bn now), OM Expansion ('24-'27) 1,172bps

which would represent 3-4 years of coverage. We think there is upside to this Cash EPS 2027e $21.75

number should current Gas + Grid demand environments hold steady/accelerate

futher, which gives visibility well into the 2030s.

Implied Cash P/E 49x

Target Price $1,061

Potential Risks Bear Case

History of Volatility: Each of GEV’s three segments has had extended periods of Organic Growth (CAGR: '24-'27) 9%

losses and/or cash-burn pre-spin. We believe this is a new era, but It is possible that OM Expansion ('24-'27) 1,056bps

operating volatility could continue.

Cash EPS 2027e $18.74

Gas Turbine Production Capacity: Following the recent announcement from key

competitor Siemens Energy (ENR-DE, not covered), it appears that gas turbine

Implied Cash P/E 30x

production capacity is moving closer to current demand levels, which may pressure

Target Price $562

pricing momentum going forward.

Project Delays: It is possible that political uncertainty, permitting delays, and long

lead times could lead to slower backlog conversion and/or order weakness. This

could flatten out the EBITDA ramp beyond 2027/28.

Scenario Commentary

Bull Case: We assign a ~49x multiple to our 2027e EPS to arrive at a YE26 target price.

Base Case: We assign a 22x multiple to our 2029e EBITDA and discount back two years to arrive at a YE26 target price.