GE Vernova shares recovered 3.6% to close at $957.27 after Jefferies lifted its price target for the power equipment and services company to $1,185 from $1,155. Analyst Julien Dumoulin-Smith maintained a Buy rating, arguing that investors may be placing too much emphasis on whether equipment orders have reached a peak.
The stock had entered Friday’s session more than 23% below its 52-week high of nearly $1,196, reached in late June. Jefferies’ assessment suggests the market may be overlooking the longer-term earnings potential of GE Vernova’s services business, particularly the recurring maintenance and upgrade work required for large gas turbines.
Services revenue remains central to the outlook
GE Vernova’s equipment orders doubled year over year in the second quarter, but Dumoulin-Smith believes the focus on order growth is distracting from the company’s installed base and future service revenue. His estimates indicate that services revenue could exceed $70 million per gigawatt-year in the 2030s, based on an installed base of more than 400 gigawatts.
He also contends that GE Vernova’s earnings are less dependent on data-center construction cycles than those of companies selling cooling systems or low-voltage electrical equipment. Jefferies estimates that the company’s services business in 2030 will be only about half the size it could reach by 2040, leaving what the analyst sees as a substantial long-term growth runway.
Analysts remain broadly positive
Wall Street’s overall stance remains favorable. Approximately 78% of analysts covering GE Vernova rate the stock a Buy, compared with a typical Buy ratio of 55% to 60% for S&P 500 companies. The average analyst price target is around $1,240, above Jefferies’ revised target.
GE Vernova trades at roughly 45 times forward earnings, compared with about 30 times for peers Eaton and Schneider Electric. Dumoulin-Smith argues that the premium reflects the expected expansion of the services business. Fitch Ratings recently upgraded GE Vernova’s long-term issuer default rating to A- from BBB+, citing stronger EBITDA margins and solid free cash flow.
Results and guidance could shape the next move
Jefferies identified several potential catalysts for the stock, including a possible third-quarter 2026 earnings beat and raised outlook, fiscal 2027 guidance expected in January, and longer-term guidance updates anticipated in March 2027. Those events could lead investors to reassess the company’s future services earnings, which Jefferies believes may be understated in current buy-side and sell-side forecasts.
Despite the pullback from its June peak, GE Vernova remains up 42% year to date, according to InvestingPro data. BMO Capital has an Outperform rating, supported by its view of gas turbine demand, while Mizuho has set a $949 target based on expectations for increased gas turbine manufacturing capacity.
