Analyst sees 30 GW gas turbine capacity plan as demand-backed, not oversupply risk, despite initial 6.4% stock drop.
Morgan Stanley raised its GE Vernova (GEV) price target to $1,350 from $1,250, maintaining an Overweight rating, after the company announced plans to expand gas turbine capacity to 30 GW by 2030. The move follows a 6.4% share decline on July 22, despite record orders and raised full-year guidance.
GE Vernova’s new 30 GW target, up from 24 GW by 2028, sparked concerns about potential oversupply. However, Morgan Stanley analyst David Arcaro argued the capacity is largely pre-contracted, pushing oversupply risks to 2032 or later. The stock rebounded 4.45% on July 23 to $1,028.86, up 51.4% year-to-date.
Arcaro described the initial sell-off as a knee-jerk reaction, noting the 9% decline was an overreaction to demand signals in the quarter. The company’s order book supports the capacity expansion, mitigating near-term pricing pressures.