On Monday, analysts focused on stocks of a major tech company and an energy firm. Evercore ISI reduced its price target for Alphabet, citing antitrust concerns, while Barclays initiated coverage of GE Vernova with an overweight rating. Below are the details of these developments.
Barclays on GE Vernova
Barclays initiated coverage of GE Vernova, suggesting strong future performance for the energy stock. The firm’s overweight rating came with a price target of $250, about 11% above the previous Friday’s closing price. GE Vernova, which separated from General Electric in April, has seen its shares surge by 72% since the spinoff.
Analyst Julian Mitchell highlighted the stock’s potential for future organic growth, noting that investors are already willing to pay a premium. He wrote that this high growth profile could lead to upward revisions in valuation multiples and positive consensus estimate momentum. Furthermore, Mitchell emphasized that GE Vernova’s capital expenditure (capex) exposure is a positive, particularly in the electric utility sector. Mitchell explained that electric utility capex is attractive due to favorable pricing and a brighter outlook for U.S. electricity consumption, where GE Vernova holds significant market shares.
Mitchell also expressed optimism about growing electricity demand in the U.S., pointing to data center demand as a specific growth driver.
Evercore ISI on Alphabet
Evercore ISI lowered its price target for Alphabet from $225 to $200, attributing this reduction to anticipated antitrust issues. Despite retaining an outperform rating on the Google parent, analyst Mark Mahaney predicted a price target implying a 27% upside potential.
Mahaney expressed that medium-term uncertainty over the Department of Justice’s antitrust trials and their potential remedies might limit Alphabet’s short- to medium-term re-rating potential. He suggested a "worst-case" scenario where Google might be prohibited from bidding for exclusive search distribution deals in the U.S., possibly allowing another company, like Microsoft, to secure those deals. This situation could lead to a significant market share loss for Google, ranging from 20% to 50% on search access points covered by those deals.
However, Mahaney highlighted that even in a severe scenario with a 60% share loss, the impact on Google’s earnings per share (EPS) might still remain in the single-digit percentage range due to substantial savings in Traffic Acquisition Costs (TAC).
Alphabet shares have risen more than 12% year-to-date.
