Key Takeaways
- Vertiv stock jumped 6% after Bernstein called the political risk to US data-center construction overstated.
- Bernstein expects developers to pay more for power as projects go ahead. It also likes Eaton, GE Vernova and Quanta Services.
- Analysts expect Vertiv’s normalized EPS to more than double from 2025 to 2027.
- Vertiv no longer reports orders, so February’s report is the next real check.
Vertiv (VRT) jumped 6% today, Election Day, after Bernstein said the political threat to US data-center construction is smaller than the market thinks.
In a note after Monday’s close, Bernstein kept its Outperform rating and $376 target on Vertiv. It also named Eaton (ETN), GE Vernova (GEV) and Quanta Services (PWR) among its other picks.
The fight is over the power bill
Bernstein counts 244 gigawatts, about 56% of the 433-gigawatt US data-center pipeline, as exposed to political risk.
But it expects the jobs and tax revenue that data centers bring to soften elected officials’ positions. Where the politics do bite, Bernstein expects developers to pay a bigger share of electricity and grid-upgrade costs. It sees that cost as relatively immaterial.
Vertiv’s earnings are still climbing
In the third quarter, revenue rose 61% to $4.31 billion and organic orders more than doubled. Management also raised its full-year adjusted EPS guidance to $7.10-$7.20.
Analysts expect normalized EPS to climb from $4.20 in 2025 to $9.74 in 2027 and $12.54 in 2028:
Vertiv (VRT): normalized EPS, actual and consensus estimates, $ per share, fiscal 2023-2028 (TIKR)
Yet at Monday’s close, it traded at 24x forward earnings. That’s below its five-year average of 27x and less than half its May peak of 55x:
Vertiv (VRT): forward (NTM) P/E, last 5 years (TIKR)
At today’s price, it’s about 26x.
TIKR tracks 30 analysts on Vertiv. How many say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on Vertiv, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See Vertiv’s Analyst Ratings
The rest of Bernstein’s list
Eaton reported a record third quarter this morning, a second reason for its 7% jump. Sales rose 28% to $8.9 billion. The twelve-month average of organic orders rose 39% in Electrical Americas and 51% in Electrical Global. Eaton doesn’t say how much of that comes from data centers.
GE Vernova rose 6%. Its third-quarter orders rose 96% organically to $29.3 billion. A fight over who pays won’t undo that kind of demand.
Quanta may gain the most if developers pay for grid upgrades, since those upgrades still get built. It ended September with a record $63.7 billion backlog.
A bigger power bill is still a sale for Vertiv
Bernstein has this right. A developer that pays more for its grid hookup still has to buy the power and cooling gear inside the building. So the fight matters far less to Vertiv than the market fears.
Of course, Bernstein expects stocks to drop at first if candidates who want tighter limits on data centers do well. And now that Vertiv has stopped reporting orders, February’s report and its first 2027 guidance are the next real check.
So what is Vertiv stock actually worth?
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