GE Vernova Inc. has experienced a significant surge in its stock value, reflecting robust demand for new natural gas-fired power, following a series of shareholder rewards. The company’s shares rose by 10% before regular trading began on Wednesday, a notable increase coming on the heels of its announcement to double its dividend and expand its share buyback program, in addition to raising its earnings projections during an investor day event in New York.
The firm has capitalized on the increasing electricity demand in the U.S., largely driven by the growth in data centers, the rise of artificial intelligence, and the overall electrification of the economy. Since spinning off from General Electric Co. in early 2024, GE Vernova’s stock has soared nearly 90% this year.
CEO Scott Strazik emphasized the role of AI in the company’s growth, stating, “AI is a real driver for us right now, but it isn’t the only driver. We’re going to generate a lot of cash, and that’s going to give us a chance to play offense.” GE Vernova projected future earnings to reach $52 billion, up from a previous estimate of $45 billion for the period beyond 2028, and increased its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) margin for the same timeframe to 20%, up from 14%.
This optimistic outlook led Oppenheimer & Co. to upgrade their recommendation for the company to a buy. Analysts noted GE Vernova’s expertise in high and medium voltage technologies and integrated solutions, which positions the company favorably for market share gains. They suggested that this capability could make GE Vernova the “primary technology partner for multiple hyperscalers.”
Additionally, GE Vernova announced an increase in its quarterly dividend to 50 cents per share and upped its share repurchase authorization to $10 billion from $6 billion. The company anticipates growing its total backlog significantly, from $135 billion to approximately $200 billion by the end of 2028, which includes plans to double its electrification segment backlog to $60 billion.
While the overall forecast continues to indicate strong profit margins in its power and electrification segments, the company expects slightly weaker performance in its wind segment. For the power and electrification businesses, GE Vernova projects adjusted EBITDA margins of 22% each by 2028, contrasted with a forecasted margin of 6% for the wind sector.
