On Tuesday, a significant rise in the share price of GE Vernova (GEV) was observed following a revision of the price target by analysts from the Bank of America. The price target was shifted from $380 to $415, handsomely surpassing the analyst consensus compiled by Visible Alpha that was set at $386. The analysts also retained a "buy" rating envisaging a positive future for the company due to escalating gas turbine prices. This resulted in the company's closing share price climbing by 4.2% to hit $382.26 on Tuesday and reflecting an increase of over 16% since the beginning of the year.
The Bank of America expressed its limited ability to estimate gas turbine prices as these costs fluctuate based on the clientele and the unpublicized auctioning of contracts. However, analysts cited government cost assessments, particular market exchanges, and the producer price index data to suggest that prices have been growing at a high-single-digit pace since 2019. This upward trend in prices is poised to continue and should provide a beneficial environment for GE Vernova.
Moreover, the analysts conveyed that GE Vernova isn't limited to gas turbines alone and possesses opportunities in alternative sectors including steam turbines, heat recovery steam generators, and other equipment. The company is scheduled to release its fourth-quarter earnings before the start of trading on January 22.