GE Vernova's (GEV) new 2028 financial targets are a "very strong update" and consistent with the positive takeaways from the recent investor meetings held with the company's CEO, UBS said in a Tuesday note.

The new targets set a minimum baseline of consolidated earnings before interest, taxes, depreciation, and amortization, or EBITDA, of $10 billion, exceeding UBS' forecast of $8.7 billion and the consensus estimate of $9.5 billion, UBS analysts said. The update signals annual EBITDA growth for the company nearing 50% from 2025 to 2028, the analysts noted.

For the critical Power segment, GE Vernova projected a 2028 margin of 22%, up from 16%, which implies EBITDA of $7 billion compared with expectations of $5.5 billion to $6 billion, the analysts said. They added that the forecast is consistent with their view that Power margins should "meaningfully" surpass prior peak levels, driven by strong demand pricing.

The analysts said that the company's EPS can approach $30 per share over the next several years, implying that shares are apparently cheaper when compared with expected EPS of $7 in the current year. Beyond 2030, there should also be meaningful earnings growth on GE Vernova's high-margin service growth, according to the note.

UBS maintained the company's stock rating at buy and price target at $760.

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