GE Vernova (GEV) Q1 results exceeded expectations due to strong profit margins and high order growth, as well as reiterated 2025 guidance despite facing $300 million to $400 million in tariff-related costs, Morgan Stanley said in a note Thursday.

There's a chance that GE Vernova could raise its 2025 guidance if it manages tariffs well or if tariffs, especially from China, decrease, the investment firm said.

If strong market prices for gas turbines continue, GE Vernova's profits could surpass Morgan Stanley's 2028 estimates by up to 15%, according to the note.

The company plans to handle tariffs by shifting procurement away from China, adjusting prices, and cutting administrative costs, Morgan Stanley analysts noted.

Gas Power remains the primary source of growth, with potential earnings before interest, taxes, depreciation, and amortization margins over 20% by 2028, Morgan Stanley said.

Morgan Stanley maintained an overweight for GE Vernova and raised its price target to $422 from $400.

Shares of the company were up about 5.6% in recent trading.

Price: 356.06, Change: +19.97, Percent Change: +5.94