GE Vernova joins Outperform by Barclays amid ‘extraordinary range’ of capital returns

Offshore wind turbine farms on the ocean. Sustainable energy — NiseriN/iStock via Getty Images

GE Vernova (NYSE:GEV) extends his winning streak to six sessions, +1.7% after hitting another intraday record high of $231.51 as Barclays initiates coverage with an Outperform rating and a $250 price target, believing the company has “extremely strong capital deployment scope.”

Analyst Julian Mitchell expects ongoing efforts to improve productivity and volume utilization to drive very strong earnings and free cash flow growth, with significant share repurchases and rapid dividend increases expected in the future, which management is likely to detail in the coming months.

Mitchell forecasts that GE Vernova (GEV) will end 2024 with $7 billion in net cash, which could be used to boost sales and earnings through mergers and acquisitions or returned to shareholders through dividends and share repurchases.

The analyst believes GE Vernova (GEV) EBITDA margins could expand by ~500 bps by 2025 or 2026 as the Grid business benefits from favorable price-cost drivers, Offshore Wind losses narrow rapidly as order backlog shrinks on sales recognition, and Gas Power margins expand on higher volume demand and favorable pricing drivers.

BMO analysts initiated coverage of GE Vernova (GEV) with an Outperform rating last Friday, a day after the company reaffirmed its full-year revenue guidance.