RBC Capital Downgrades GE Vernova (GEV) to Sector Perform

GE Vernova, Inc. (NYSE:GEV) is one of the best stocks to buy according to Jim Simons’ Renaissance Technologies. On October 1, RBC Capital Markets downgraded GE Vernova, Inc. (NYSE:GEV) stock from “Outperform” to “Sector Perform.” It also set the price target at $605, based on 13 times its 2030 earnings estimate of $12.2 billion.

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RBC analysts stated that their decision is supported by the view that the market is already valuing GE Vernova on long-term earnings expectations that leave little room for further upside. The company continues to benefit from strong demand for electricity generation and grid infrastructure, as well as improved pricing and efficiency. However, RBC expects revenue growth in the power segment to slow toward the end of the decade compared to current consensus forecasts.

In the core power division, RBC predicts margins to reach 21% by 2028. This is above GE Vernova’s own target, and is boosted by higher service demand and factory expansion. RBC noted that new service contracts typically only begin to make an impact three to four years after equipment is installed, meaning contributions from recent sales may come later than consensus models assume.

GE Vernova, Inc. (NYSE:GEV) is a global energy company. It operates through three core segments: Power, Wind, and Electrification. The company delivers technologies that generate, transfer, and store electricity worldwide.

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Disclosure: None. This article is originally published at Insider Monkey.