Key Points
Orders and backlog are strong, but that may already be built into GE Vernova stock.
Investors need to look beyond just analyst headlines.
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GE Vernova (NYSE: GEV) stock has been flying, and its Q1 report last week helped justify why. Analysts reacted to the strong results by raising price targets on the energy equipment supplier.
One Wall Street analyst thinks the stock has run too far, though. A fresh downgrade has some investors taking profits today, knocking GE Vernova shares down by 4.4% as of 12:15 p.m. ET.
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Does taking profits make sense?
Locking in gains is never a bad thing, as long as it's part of an overall strategy. But sometimes investors react to an analyst downgrade without digging into the details. That may be what's sinking GE Vernova stock today.
Analysts raised average price targets by over 20% after GE Vernova reported orders soared 71% with all segments showing growth last week. That includes BNP Paribas analyst Moses Sutton, though his note came with a downgrade, too, according to Barron's. He rates the stock a "hold", down from a "buy" rating. His new price target is $1,179 a share, though, which is now still higher than recent levels.
GE Vernova shares have soared more than 180% over the last year, and Sutton thinks further share price growth may be difficult. With much of the company's turbine capacity already sold out through 2030, that could mean growth will be limited over the next five years.
The wind business has recently been relying on onshore projects, and growth in the power and electrification segments may already be reflected in GE Vernova's stock price. But long-term investors should view business momentum as a positive and avoid trying to time share price movements. It may be stable for a while after such a strong run, but that doesn't mean today's selling is justified.
Should you buy stock in GE Vernova right now?
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Howard Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends GE Vernova. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
