Key Takeaways
- GE Vernova stock jumped Monday following its first upgrade, from JPMorgan analysts who now call the stock “overweight,” indicating confidence in future performance.
- The upgrade comes a week after GE Vernova spun off from GE Aerospace, completing the conglomerate’s split into three separate entities.
- GE Healthcare spun off last year, with General Electric’s health, energy, and aerospace technology divisions now operating separately from each other.
GE Vernova (GEV) shares jumped in intraday trading Monday after the recently spun-off energy division of conglomerate General Electric received its first upgrade, from JPMorgan (JPM) analysts.
The analysts upgraded GE Vernova to “overweight” from “neutral,” indicating their confidence that the stock should perform better in the future. Analysts held their year-end price target at $141, about 15% above where GE Vernova closed last week at $122.70.
Last week, General Electric completed its split into three separate publicly traded companies, which it first announced in late 2021. The health unit was spun off last year to become GE Healthcare Technologies (GEHC), and the energy and aerospace technology companies split last week to become GE Vernova and GE Aerospace (GE), respectively.
Analysts and investors have spent the first week since the split determining at what price GE Aerospace and GE Vernova should trade, and what value the companies have apart from each other. Many will likely be looking to GE Vernova’s first earnings report as its own entity before the bell April 25 as an indicator of how the energy-based company will fare on its own, with JPMorgan analysts calling the next few quarterly reports “key catalysts” for the stock’s outlook.
JPMorgan analysts wrote Monday that they view GE Vernova’s 14% stock-price pullback from last week’s debut as an “attractive entry point for what we believe will be a core holding for investors in the US/global electrification theme.”
They also wrote that the company could benefit from increased electricity demand from things like data centers that power artificial intelligence (AI) models.
Bank of America analysts reiterated a “buy” rating and adjusted their price target of GE Aerospace in a Monday note to compensate for its new structure as a standalone company, to $165 from the $175 pre-spinoff target. GE Aerospace shares closed Friday at $156.30.
GE Vernova stock was up 6.0% at $130.00 as of about 1:30 p.m. ET Monday. GE Aerospace was down about 0.4% to $155.69.