Al Root
GE Vernova reported solid fourth-quarter numbers, but the real show was guidance. It went up -- and just after the company had given 2026 and 2028 outlooks in early December.
Shares jumped in early trading on Thursday. Then the gains faded, leaving the stock bobbing around all day, before investors decided the earnings report was good enough.
The power generation technology company on Wednesday reported earnings before interest, taxes, depreciation, and amortization, or Ebitda, of $1.2 billion from sales of $11 billion. Wall Street was looking for $1.3 billion and $10.6 billion, respectively. A year ago, GE Vernova reported Ebitda of $1.1 billion from sales of $10.6 billion.
Ebitda was a little light, but orders at $22.2 billion far exceeded sales. And more orders led to higher guidance. GE Vernova increased 2026 sales guidance to a midpoint of $44.5 billion, up from $41.5 billion, and 2028 sales guidance to about $56 billion, up from $52 billion.
The new orders were also at better profit margins. For 2026, management expects an Ebitda profit margin of about 12%, up from 8.4% in 2025. For 2028, margins should be about 20%, implying Ebitda of about $11.2 billion. Wall Street currently projects Ebitda closer to $11 billion. That estimate was $7.4 billion a year ago.
GE Vernova shares jumped about 6% initially on Thursday, but gains faded, leaving them down more than 1% at one point in premarket trading. Shares were in the red early in regular trading, before they closed up 2.7% at $711.59. The S&P 500 and Dow Jones Industrial Average finished flat.
It is a tepid response to a bullish outlook. Investors might have wanted more 2025 Ebitda. Guidance implies Ebitda of about $5.34 billion. Wall Street projects $5.47 billion.
Starting points matter, too. GE Vernova has been a strong performer. Coming into Wednesday trading, shares were up 95% over the past 12 months, leaving them trading for 51 times earnings expected over the coming 12 months.
Still, the quarter looks solid. BofA Securities analyst Andrew Obin projected Ebitda of $1.5 billion. He didn't get that, but he also projected orders of $17.6 billion, well below the $22.2 billion received. Data centers should represent about one-third of fourth-quarter orders for GE's power turbines, with utilities also moving more toward natural-gas turbines to meet rising demand for electricity, Obin wrote in a preview report.
Obin rates shares Buy and has a $804 price target. Overall, 69% of analysts covering the stock rate shares Buy, according to FactSet. The average Buy-rating ratio for stocks in the S&P 500 is about 55%. Wall Street's average price target for GE Vernova stock is about $768 a share, up $76 since the company's December event, where it provided the prior 2028 outlook.
Along with earnings, GE Vernova provided an update on M&A. GE Vernova agreed to buy Prolec in October, and that deal will close in the coming days, contrary to prior expectations of a mid-2026 closing. Faster closing drove some of the revenue upside for 2026.
That said, a lot is going right at GE Vernova. CEO Scott Strazik is worried most about business execution amid all the industry tailwinds. Vernova must remain "hungry and humble" to capitalize on them.
Write to Al Root at allen.root@dowjones.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
January 29, 2026 17:27 ET (22:27 GMT)
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