This article first appeared on GuruFocus.
GE Vernova (NYSE:GEV), the power-generation and grid-equipment group, has demand piling up even as Jefferies shifts its preferred picks. Shares rose 1.61% to $871.66 at 9:55 a.m. ET on November 2. Jefferies removed the company from its Franchise Pick list and added Nextpower, The Fly reported that day. The list change alone does not establish a rating downgrade.
The bigger operating story is the workload ahead. GE Vernova reported $29.3 billion in quarterly orders against $12.642 billion in revenue in its October 28 results, putting orders at roughly 2.3 times sales. Backlog reached $197 billion, with management targeting more than $200 billion in the fourth quarter. That pipeline offers visibility into future business, but shipment schedules and margins will determine how much becomes earnings and cash.
The GuruFocus snapshot adds a cautionary signal: a GF Score of 23/100 and two severe warning signs sit alongside a 22.87 price-to-earnings ratio. Those readings suggest the expanding backlog deserves scrutiny beyond its headline size. The next tests are delivery capacity, progress toward the backlog target and margin execution as power and grid production grows. Demand is substantial; converting it into profitable deliveries could prove more decisive for investors.
Source: finance.yahoo.com — article syndicated from the publisher’s feed; all rights remain with the original publisher.
