GE Vernova stock 'has been a home run' but Wolfe Research still sees value

Investing.com -- Wolfe Research initiated coverage of GE Vernova with an Outperform rating and a year-end 2025 price target of $403 in a note Wednesday, emphasizing that while the stock has delivered impressive returns since its spin-off from General Electric (NYSE:GE), it still offers significant upside.

"There is no better proxy for accelerating demand for electricity," Wolfe analysts stated, citing GE Vernova's position as the leading supplier of power equipment and services.

The firm pointed to sustained above-average growth potential fueled by electrification trends and optionality in operating margins and free cash flow (FCF).

Despite trading at 51x forward earnings and 26x EBITDA, Wolfe highlighted that the current valuation reflects GEV's early-stage earnings ramp, with "representative earnings power" not expected until 2027.

By then, Wolfe projects the stock trading at 11x its 2027 estimated EBITDA, compared to 16x for the broader large-cap peer group.

Upcoming catalysts are said to include GE Vernova's second investor event on December 10, where analysts expect management to upgrade its medium-term outlook.

Potential updates include raising 2028 sales growth projections from mid-single-digit to high-single-digit compound annual growth rates and improving EBITDA margin targets from 10% to the mid-teens, driven by productivity gains, pricing power, and tapering losses in the offshore wind segment.

Additionally, Wolfe sees potential for "significant capital return" given GE Vernova's strong balance sheet, which includes $7 billion in net cash and an estimated FCF expansion from $2 billion in 2024-2025 to $4-6 billion annually by 2026-2028.

GE Vernova offers a unique investment opportunity, analysts concluded, describing it as a broad play on "powerful electrification themes" with further growth and margin expansion well beyond current market expectations.