It was sort of a mixed bag day for energy infrastructure maker GE Vernova (GEV), noted a CNBC report. It made a nice new inroad with analysts, but it also shut down an entire plant. The combination proved less than pleasant to investors, who sold off and sent shares sliding over 2% in Thursday’s trading.
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Word from Robert W. Baird analysts was certainly welcome, as analyst Ben Kallo got involved and started coverage with a bang. Kallo declared GE Vernova an Outperform, and put a $448 per share price target on the stock as well. This is a pretty substantial surge, too, as it represents over 21% upside against the closing price from Wednesday.
Basically, Kallo notes what we all probably already knew, but do not think much about: electricity is in demand. Everywhere. And probably forever, too. Since GE Vernova’s focus is on not only making but also storing electricity, that represents a pretty substantial business case. That means expanding margins for GE Vernova that should go on for years. Moreover, Kallo notes, GE Vernova’s “non-core businesses” are further reason to get interested.
Wind Plant Closed
But this news comes at an odd time for GE Vernova. Just two days ago, it announced plans to close the LM Wind Power facility in Brazil, which produced blades for wind turbines. The closure will cost 1,000 jobs, and the facility has apparently been in place since 2013, making it a long-time operation that is about to get shuttered.
LM Wind Power is a subsidiary of GE Vernova, and the closure is coming about as the result of “declining demand in the Latin American market.” On the plus side, the closure will not happen immediately, as the last blades on the production line will come first. Then the closure. This will hopefully give employees time enough to get started on finding new jobs.
Is GE Vernova a Good Stock to Buy?
Turning to Wall Street, analysts have a Strong Buy consensus rating on GEV stock based on 18 Buys and three Holds assigned in the past three months, as indicated by the graphic below. After a 165.83% rally in its share price over the past year, the average GEV price target of $436 per share implies 20.13% upside potential.
