Skip to main content

GE Aerospace(GE-N)

Today's Change
Real-Time Last Update Last Sale Cboe BZX Real-Time

1 Wall Street Analyst Just Gave GE Vernova Stock its First Buy Rating Upgrade. Is It Time to Buy Now?

Motley Fool - Wed Apr 10, 9:45AM CDT

GE Vernova(NYSE: GEV) completed its spinoff from parent General Electric (now GE Aerospace) last week, and at least one analyst seems to be more positive about the new company's prospects. While JPMorgan analyst Mark Strouse initiated coverage on the global energy company telling clients to wait and just hold shares, he has just released the first upgrade for the spinoff to the equivalent of a buy rating.

Strouse has a $141 price target on GE Vernova shares. The stock began trading on April 2 and shares jumped to over $150 per share before closing down last week at about $123. Given the stock's current price of around $133, Strouse's price target implies a potential gain of about 6% over the next 12 months or so.

Strouse's quick upgrade was likely prompted by the downward movement in the stock in its first week of trading. It also takes some time to digest the details and new financial status of a spun-off company like GE Vernova.

Each holder of record of General Electric (GE) common stock received a share of GE Vernova for every four shares of GE common stock held on March 19, 2024. However, investors now need to evaluate GE Vernova's business on its own merits without considering the state of the former GE parent.

That means a belief in GE Vernova's view of a global transition to cleaner energy. In a March 2024 presentation to investors, GE Vernova CEO Scott Strazik put the investment case succinctly, saying, "The energy transition is the next investment supercycle."

As Strouse opines, now looks to be a good time to invest in GE Vernova based on its valuation. It currently trades with a price-to-sales (P/S) ratio of just 1 based on the company's current-year sales projection. Excluding potential acquisitions, management expects mid-single-digit annual sales growth for at least the next several years. That makes for a compelling case for an investment at recent levels.

Should you invest $1,000 in Ge Vernova right now?

Before you buy stock in Ge Vernova, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Ge Vernova wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of S&P 500 since 2002*.

See the 10 stocks

*Stock Advisor returns as of April 8, 2024

JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Howard Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends JPMorgan Chase. The Motley Fool has a disclosure policy.

Paid Post: Content produced by Motley Fool. The Globe and Mail was not involved, and material was not reviewed prior to publication.

More from The Globe