Investing.com -- Wolfe Research downgraded GE Vernova to Peer Perform from Outperform on Thursday, saying the energy technology firm’s sharp run-up in share price this year has left little room for upside.
The stock is up roughly 50% year-to-date, a rally Wolfe says already reflects a steep ramp in earnings through the end of the decade.
The firm estimates GE Vernova’s EBITDA could grow from around $4 billion in 2025 to as much as $15 billion, but believes much of that growth is already priced in.
“At a multiple of 20x 2027 estimated EBITDA, a lot is clearly priced in,” the analysts wrote, noting that current valuation implies an aggressive terminal growth rate of over 5%.
While Wolfe sees GE Vernova as one of the strongest long-term stories in the sector, with exposure to electrification, data center demand, and nuclear power, the firm said the risk-reward profile has turned more balanced following the recent rally.
Wolfe’s base case assumes over 50% compound annual growth in earnings per share from 2025 to 2028, far ahead of current Street estimates.
But with the stock now trading at what the firm sees as stretched valuation levels, it said it would need to see further order growth, pricing strength, and estimate revisions for 2025 and 2026 to reconsider the bullish call.
“We believe the positives are largely priced in here, leading us to downgrade the stock from OP to PP rating,” analysts concluded.