Group 1 - GE Vernova Inc. (NYSE:GEV) is positioned to benefit from the increasing demand for power generation, particularly due to the growth of data centers by big tech companies [1] - The company has a strong visibility on earnings extending to the 2030s, which is a significant advantage in the current market [1] - GE Vernova provides a range of products and services for electricity generation, including gas, nuclear, hydro, and wind technologies [2] Group 2 - While GE Vernova shows potential as an investment, there are AI stocks that may offer greater upside potential and lower downside risk [3]

Core Insights - The article highlights several stocks that are trading near buy points, with a focus on companies benefiting from data center expansion [1] Group 1: Stocks to Watch - GE Vernova (GEV) has successfully broken out past a buy point [1] - Vertiv Holdings (VRT), Dycom Industries (DY), Halozyme Therapeutics (HALO), and Viking Holdings (VIK) are also identified as stocks to watch, trading near buy points [1] - Among these, GE Vernova, Vertiv, and Dycom have reported a 35% growth in earnings per share, indicating strong performance linked to data center expansion [1] Group 2: Market Context - The article notes that the U.S. government is entering a shutdown, which may impact market conditions [1] - Despite market fluctuations, certain stocks like GE Vernova and others are highlighted for their potential as they approach key levels [1]

Group 1 - GE Vernova's expected significant growth is already reflected in its stock price, indicating that any execution, margin, or timing disappointments could result in a compression of its valuation multiple [1] - The stock is considered fairly valued based on projections for 2028, but a discount is suggested [1] Group 2 - The analysis highlights a professional background that spans various industries, providing a diverse perspective on investment opportunities [1] - The investment strategy focuses on cyclical industries, recognizing their potential for substantial returns during economic recovery while balancing risk through fixed-income investments [1]

Upgrades - BMO Capital upgraded Southwest (LUV) to Outperform from Market Perform with a price target of $57.50, up from $43, citing significant momentum and earnings upside to at least $4.00 per share in 2026 from 93 cents in 2025 [2] - Barclays upgraded Quest Diagnostics (DGX) to Overweight from Equal Weight with a price target of $210, up from $195, noting sustainable organic growth of 4% from fiscal 2024 to 2025 [3] - Guggenheim upgraded GE Vernova (GEV) to Buy from Neutral with a price target of $910, believing the market may underestimate cash generation potential and margin improvement in the electrification segment [4] - Wolfe Research upgraded Broadcom (AVGO) to Outperform from Peer Perform with a price target of $400, based on channel checks indicating the company will ship 7 million tensor processing units by 2028 [5] - Citi upgraded Spotify (SPOT) to Buy from Neutral with an unchanged price target of $650, stating the stock's valuation is now attractive and consensus estimates are beatable [5] Downgrades - HSBC downgraded Pinterest (PINS) to Hold from Buy with a price target of $24.90, down from $34.50, due to an abrupt jobs cut announcement indicating a softer near-term outlook [6] - Jefferies downgraded Kenvue (KVUE) to Hold from Buy with a price target of $18, down from $23, following shareholder approval for a merger with Kimberly-Clark [6] - Citizens downgraded SAP (SAP) to Market Perform from Outperform without a price target, citing disappointing Q4 sales results and a current cloud backlog growth of 25% versus the expected 26% [6] - D. Boral Capital downgraded Quince Therapeutics (QNCX) to Hold from Buy without a price target after negative results from a pivotal Phase 3 clinical trial [6] - Stifel downgraded Codere Online (CDRO) to Hold from Buy with a price target of $8.50, down from $9, believing the company's estimates need to reset due to a recently announced tax hike in Mexico [6]

Group 1 - TD Cowen raised the price target on GE Vernova (GEV) to $780 from $680, maintaining a Buy rating on the shares [1] - The firm noted that orders and pricing continue to exceed expectations, contributing to the positive outlook [1] - GE Vernova beat Q4 expectations, indicating strong performance in the market [1]

GE Vernova Stock Falls After Earnings. It Raises Guidance Again. - Barron'sSkip to Main ContentThis copy is for your personal, non-commercial use only. Distribution and use of this material are governed by our Subscriber Agreement and by copyright law. For non-personal use or to order multiple copies, please contact Dow Jones Reprints at 1-800-843-0008 or visit www.djreprints.com.# GE Vernova Falls After Earnings. Guidance Boost Isn't Enough to Lift the Stock.By [Al Root]ShareResize---ReprintsIn this articl ...

Financial Performance - Total revenues for the year ended December 31, 2025, were $38.1 billion, an increase of $3.1 billion (9%) compared to the previous year[199]. - Net income for 2025 was $4.9 billion, an increase of $3.3 billion, resulting in a net income margin of 12.8%[204]. - Adjusted EBITDA for 2025 was $3.2 billion, an increase of $1.2 billion, with an adjusted EBITDA margin of 8.4%[205]. - Equipment revenues increased to $20.9 billion in 2025, up from $19.0 billion in 2024, while services revenues rose to $17.1 billion from $16.0 billion[197]. - Organic revenues increased by $3.2 billion (9%), with organic equipment revenues up by $2.0 billion (11%) and organic services revenues up by $1.2 billion (7%)[200]. - Operating income for 2025 was $1.4 billion, a $0.9 billion increase, primarily due to improved performance in Electrification and Power segments[202]. - The company reported a significant increase in orders for Heavy-Duty Gas Turbines, with 110 units ordered in 2025 compared to 68 in 2024[209]. - RPO for Gas Power increased by $21.0 billion (29%) from 2024, reflecting strong demand for Heavy-Duty Gas Turbines and Aeroderivative equipment[210]. Sustainability and Environmental Commitment - The company aims to achieve carbon neutrality for its Scope 1 and Scope 2 emissions by 2030, reflecting its commitment to sustainability[25]. - GE Vernova is investing in small modular nuclear reactor (SMR) technology, marking the first commercial contract of its kind in North America[30]. - The company is committed to maintaining high environmental, health, and safety standards, adhering to various international and local regulations[62]. - The company faces risks related to sustainability goals, with potential penalties and reputational harm if expectations are not met[125]. - Changes in energy and environmental regulations could increase compliance costs and impact project economics, potentially reducing demand for the company's offerings[115][116]. Market and Demand Dynamics - GE Vernova's installed base generates approximately 25% of the world's electricity, highlighting its significant role in the electric power industry[12]. - The Electrification segment continues to experience robust demand, particularly for large-scale transmission-related equipment to interconnect renewables and modernize grid infrastructure[41]. - Demand for products in the Power segment is influenced by oil and gas regulatory policies, prices, and global supply and demand, which are largely outside the company's control[117]. - The U.S. market represents approximately 60% of the Onshore Wind segment's equipment RPO, indicating a strategic focus on this region[35]. - The company emphasizes the importance of grid modernization and investment to meet increasing energy demand and enhance energy resilience[198]. Operational Challenges and Risks - Supply chain disruptions and material shortages have affected the company's ability to meet customer obligations, leading to increased costs and reputational risks[80]. - The company relies on third-party suppliers and is exposed to geopolitical dynamics, tariffs, and other factors that may disrupt operations and financial performance[81]. - Regulatory and permitting delays can impede grid connectivity, affecting project timelines and revenue generation[100]. - The company faces significant costs related to compliance with global sanctions and regulations affecting sourcing and supply chains, including sustainability and human rights due diligence[71]. - Major events such as natural disasters and climate change can disrupt operations and increase costs, potentially affecting cash flows and business prospects[122]. Research and Development - GE Vernova plans to invest approximately $5 billion in cumulative R&D from 2025 through 2028, with half focused on industrializing existing products and the other half on long-term innovation[44]. - The company emphasizes the importance of innovation in emerging technologies, particularly in nuclear fuels and advanced energy systems, to remain competitive in global markets[92]. Corporate Governance and Compliance - The company is committed to allocating at least one-third of its cash generation to stockholders through dividends and share repurchases[24]. - The company has implemented a cybersecurity framework informed by industry standards, including NIST and ISO 27001, to manage risks[168]. - The company is subject to evolving laws on cybersecurity, data privacy, and artificial intelligence, impacting operational compliance[79]. - The Financial Services business has registered entities with the SEC and FINRA, subjecting them to various compliance and fiduciary duties[71]. Workforce and Labor Relations - GE Vernova employs around 75,000 employees globally, with approximately 70% specializing in manufacturing, engineering, or services[54]. - The company has approximately 1,400 union-represented production and maintenance employees in the U.S., with a collective bargaining agreement expiring in June 2030[66]. - Labor disputes and collective bargaining agreements could disrupt operations and increase costs[154]. - The company’s ability to attract and retain qualified personnel is critical for executing its strategy and could be impaired by competition for talent[150]. Strategic Transactions and Investments - GE Vernova announced an acquisition of the remaining 50% stake in Prolec GE for approximately $5.3 billion, expected to close in February 2026[188]. - Strategic transactions, including acquisitions and joint ventures, are critical for expanding the company's portfolio, but they carry risks related to integration and compliance[93][94].

Group 1 - GE Vernova has undergone significant changes, transitioning from a major grid-leader acquisition to a new phase in its business strategy [1] - The focus is on identifying undervalued and overlooked companies or industries with strong fundamentals and cash flows, particularly in sectors like Oil & Gas and consumer goods [1] - Energy Transfer is highlighted as a company that was previously avoided by investors but is now seen as a valuable long-term investment opportunity [1] Group 2 - The analysis emphasizes a preference for long-term value investing while also exploring potential deal arbitrage opportunities in various sectors [1] - There is a clear aversion to investing in high-tech businesses or certain consumer goods, with a preference for more traditional products [1] - The article aims to foster a community of investors who are focused on informed decision-making and superior returns through shared insights [1]

Core Insights - The demand for clean electricity is accelerating globally, driven by structural trends and technological advancements, benefiting companies like GE Vernova (GEV) and Public Service Enterprise Group (PEG) from different perspectives [1][2][10] Group 1: Company Profiles - GE Vernova is positioned as a growth-oriented infrastructure provider focused on electrification and transmission modernization, with a recent acquisition enhancing its market leadership [4][5] - Public Service Enterprise has a balanced portfolio of regulated and non-regulated utility assets, providing stable earnings and growth opportunities, supported by favorable wholesale electricity prices [6][7][18] Group 2: Financial Performance - The Zacks Consensus Estimate for GE Vernova's 2026 earnings per share (EPS) is $13, indicating a year-over-year growth of 76.6%, with a long-term earnings growth rate of 18% [9] - The Zacks Consensus Estimate for Public Service Enterprise's 2026 EPS is $4.36, indicating a year-over-year growth of 8.09%, with a long-term earnings growth rate of 7.05% [11] Group 3: Investment and Valuation Metrics - GE Vernova has a total debt to capital ratio of nil, while Public Service Enterprise has a ratio of 57.88% [13] - GE Vernova shares trade at a forward Price/Earnings (P/E) ratio of 51.89X, compared to Public Service Enterprise's P/E of 18.57X [14] - GE Vernova's return on equity (ROE) is 46.91%, significantly higher than Public Service Enterprise's ROE of 12.62% [15] Group 4: Stock Performance - Over the past three months, GE Vernova's shares have increased by 23.7%, while Public Service Enterprise's shares have risen by 1.4% [16] Group 5: Investment Recommendation - Currently, GE Vernova is favored due to its superior earnings growth, price performance, ROE, and better debt position, although both companies hold a Zacks Rank of 3 (Hold) [18]

Financial Performance - GE Vernova reported fourth-quarter revenue of $10.956 billion, a 4% increase from $10.559 billion, exceeding analyst estimates of $10.213 billion [1] - Fourth-quarter EPS was $2.79, missing the estimate of $3.18, while diluted GAAP EPS rose significantly to $13.39 from $1.73 a year earlier [1] Future Outlook - The company increased its 2026 revenue outlook to between $44 billion and $45 billion and raised free cash flow guidance to between $5.0 billion and $5.5 billion [2] - GE Vernova expects revenue of $56 billion by 2028, indicating strong growth potential [2] Stock Performance and Analyst Ratings - GE Vernova shares rose 0.8% to $716.93 in pre-market trading following the earnings announcement [3] - Evercore ISI Group analyst James West maintained an Outperform rating and raised the price target from $860 to $905 [4] - Susquehanna analyst Charles Minervino maintained a Positive rating and increased the price target from $800 to $820 [4]