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The analyst said that while AI needs power, turbines are sold out, and GE Vernova is one of three companies making big ones, it does not justify the stock trading at 38.9x forward enterprise value to EBITDA.
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According to Investing.com, the analyst also raised concerns about GE Vernova’s 2027 outlook, noting that turbines scheduled for delivery that year were ordered in 2024, much ahead of recent price increases.
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However, retail investors dismissed the cut and called for a buy-the-dip.
Shares of GE Vernova Inc. (GEV) plummeted more than 8% at close on Monday after a Wall Street analyst issued a ‘Sell’ rating on the company, with a price target that implies a downside of more than 46% from its last close.
However, retail investors dismissed the rating, with many traders calling for a buy-the-dip.
Why Did GEV Stock Get A ‘Sell’ Rating?
According to a summary on The Fly, GLJ Research analyst Gordon Johnson initiated coverage of GE Vernova with a ‘Sell’ rating and $470 price target. The firm said that it views the company as a “cyclical gas-turbine manufacturer priced as a secular compounder.”
The analyst said that while AI needs power, turbines are sold out, and GE Vernova is one of three companies making big ones, it does not justify the stock trading at 38.9x forward enterprise value to EBITDA for a business whose own team said, “We do think it’s a cycle.”
According to Investing.com, the analyst also raised concerns about GE Vernova’s 2027 outlook, noting that turbines scheduled for delivery that year were ordered in 2024, much ahead of recent price increases.
According to the report, GLJ Research expects about three percentage points of backlog margin on the 2027 vintage, compared with 10-11 percentage points on the 2025 vintage shipping in 2028.
In its latest earnings report, the company upgraded its revenue guidance to between $45.5 billion and $46.5 billion, supported by massive data center power demand and a $176 billion backlog.
Broader Wall Street Stance On GEV Stock
According to Koyfin, GEV stock has a 12-month average price target of $1,237.34, implying upside of over 41% from its last close.
Of the 37 analysts covering the stock, 30 have a ‘Buy’ or higher rating, while the rest have a ‘Hold’ rating.
GEV Stock: What’s Retail Saying?
On Stocktwits, retail sentiment on GEV stock turned ‘bullish’ from ‘bearish’ over 24 hours, while message volumes jumped 5,000%. The stock was also among the top trending tickers on the platform at the time of writing.
