GE Vernova Stock In Focus After Wells Fargo Initiates Coverage With Overweight Rating: Retail Stays Confident

Wells Fargo has reportedly initiated coverage of energy equipment manufacturer GE Vernova Inc ($GEV) with an ‘Overweight’ rating and a price target of $385.

The target implies nearly 10% upside potential from the current levels. Shares of the firm were trading over 2% higher on Thursday afternoon, following the announcement. Notably, GE Vernova was spun-off from General Electric earlier this year.

Wells Fargo analyst Michael Blum believes strong AI-related power demand could make GE Vernova a key beneficiary, according to a CNBC report.

The analyst noted that gas will be the most in-demand form of energy in the coming times and this could lead to an 8% compounded annual growth rate (CAGR) for the company in the next eight years.

“As power demand grows and more distributed generation is added to the mix, aging grids will require significant investment to manage the increasingly complex and dynamic environment,” Blum stated, according to the report.

“GEV’s transformers, HVDC [High-voltage direct current], and grid software offerings are well positioned to benefit from this growing demand,” he added.

According to the analyst, power demand is set to grow at a 3% CAGR from 2024 to 2032. “We project high levels of demand for its suite of generation and grid products, and believe the company has strong potential to accrete margin through price raises and lean manufacturing,” Blum stated.

Meanwhile, retail sentiment on Stocktwits continued to trend in the ‘bullish’ territory (60/100), accompanied by ‘high’ message volumes.  

GEV’s Sentiment Meter and Message Volume as of 1:26 p.m. ET on Nov. 21, 2024 | Source: Stocktwits

Some Stocktwits users expressed optimism on the stock’s potential going ahead.

Since March 2024, the stock has gained a whopping 167%, significantly outperforming the benchmark indices.