Al Root
GE Venova's first-quarter results, due Wednesday, should have investor dancing, according to BofA Securities.
For the quarter, Wall Street is looking for earnings per share of 45 cents from sales of $7.6 billion. Vernova was still part of General Electric at the end of March 2024. The separation was completed on April 2. The GE power business reported sales of $7.2 billion in the first quarter of last year.
Coming into Wednesday trading, GE Vernova stock was down only about 1%, while the S&P 500 and Dow Jones Industrial Average fell 10% and 8%, respectively.
The small move belies recent volatility tied to tariffs, President Donald Trump's renewable energy policies, and Chinese AI competition. Shares have traded almost as high as $440 and as low as $270 so far this year. They closed Wednesday just above $326.
"We expect GE Vernova to be one of the few companies in our coverage to reiterate 2025 guidance," wrote BofA Securities analyst Andrew Obin in a preview report. He sees calls tariff exposure manageable and expects Vernova to benefit from deregulation efforts. In fact, first-quarter numbers "may have investors dancing the electric boogie."
That sounds like a positive. Obin rates shares Buy and has a $485 price target for the stock.
Management's guidance provided in January was the same as what the company gave at its December investor event in New York. Sales in 2025 were forecast at $36 billion to $37 billion. Earnings before interest, taxes, depreciation, and amortization (Ebitda) profit margins will be in the "high single digits." That implies 2025 Ebitda of about $2.9 billion to $3.3 billion. Wall Street currently projects $3.1 billion.
To be sure, the quarter might not turn out as well as Obin expects, but investors could use some good vibes right now.
Options markets imply shares will move about 7%, up or down, following earnings. Shares have moved an average of about 3% up or down following the past three quarterly reports. Shares have risen twice and fallen once over that span.
Write to Al Root at allen.root@dowjones.com
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(END) Dow Jones Newswires
April 22, 2025 19:33 ET (23:33 GMT)
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