US Electrical Equipment & Multi-Industry: EE/MI Morning Note – GE V deserves better, +Earnings (OTIS, TDY, HON, DOV)

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US Electrical Equipment & Multi-Industry: EE/MI Morning Note – GE V deserves better, +Earnings (OTIS, TDY, HON, DOV)

Global Research

23 July 2026ab

US Electrical Equipment & Multi-Industry Equities

AmericasEE/MI Morning Note – GEV deserves better,

+Earnings (OTIS, TDY, HON, DOV) Industrial, Diversified

Amit Mehrotra

Analyst

amit.mehrotra@ubs.com

GEV shares were down about 9% yesterday following the 2Q results, but even after +1-201-352 1410

accounting for the move, the shares are still up 50% year to date and +80% over the

Neal Burk

past 12 months.

neal.burk@ubs.com

To be sure, there was nothing in the release that concerns us. Demand for the +1-212-713 4066

company’s largest industrial gas turbines remains very robust – the company raised its Pratap Singh

Power backlog to “at least 125 GW” by the end of this year vs. 110GW prior, and said Analyst

the backlog will increase further in 2027. It is also sold out through 2030 and expects to pratap-za.singh@ubs.com

be sold out of half its 2031 slots by the end of this year. +1-212-821 3112

Zachary Walljasper

Also, margins are very strong. The company is only projecting about 100 basis points Associate Analyst

sequentially lower margins in Power from 2Q to 3Q despite meaningful seasonality zachary.walljasper@ubs.com

+1-212-713 9829

headwinds (outages significantly reduce in 3Q vs. 2Q, which impacts higher-margin

service revenue). The sequential margin decline last year was about 300 basis points.

On the back of this demand and pricing/margin strength, the company announced a

capacity increase to 30 GW in 2030. This means GEV will effectively double its capacity

from 1H26 (15 GW) to 2030 (30 GW). We estimate the capital required to do this is

relatively small in the context of the company’s meaningful cash flow.