GE Aerospace

NYSE:GEUnited States

Al Root Investors are looking for stock winners and losers as President-elect Donald Trump's cabinet takes shape. Saturday, Trump nominated Chris Wright for energy secretary. Wright is the CEO of fracking-services company Liberty Energy as well as an alumnus of the Massachusetts Institute of Technology. The pick is a "strong signal for natural gas," wrote William Blair analyst Jed Dorsheimer in a Monday report, saying Wright believes that while renewables will meet part of electricity demand, nuclear and fossil fuels will play a role as well. "GE Vernova is best positioned to benefit as the energy sector under Wright reverts to natural gas and pragmatism to boost domestic energy production," wrote Dorsheimer. GE Vernova makes wind turbines and power grid technologies. Its most profitable division makes natural gas-fired power generation turbines. The company is increasing turbine production to about 80 a year from 55. Dorsheimer rates GE Vernova stock the equivalent of Buy, and doesn't have a price target. A Buy rating for him essentially means he expects shares to outperform the market in the coming year. His peers largely agree. Almost 75% 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%. The average analyst price target for GE Vernova shares is about $317, up about $10 since the Nov. 5 presidential election. Coming into Monday trading, Vernova stock was up about 4% since the election and up about 136% since it started life as an independent company after being spun out of GE Aerospace on April 2. The gains leave GE Vernova stock trading at about 20 times Dorsheimer's forecast for 2026 earnings before interest, taxes, depreciation, and amortization. He calls that a "premium" but wrote that he believes "further upside remains." Faster growth in demand for its gas turbines would be one source of additional gains. GE Vernova stock was up 0.7% in early trading Monday at $332.02. The S&P 500 rose about 0.2%, while the Dow Jones Industrial Average fell about 0.2%. 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 November 18, 2024 10:37 ET (15:37 GMT)