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GE Vernova's Strong Quarter Shifts Investor Focus to Turbine Order Conversions, BNP Paribas Says
GE Vernova (NYSE: GEV) delivered third-quarter results that met high investor expectations, but the focus is now shifting to the company's ability to convert its pipeline of gas turbine orders into firm contracts, according to an analysis from BNP Paribas.
Results Meet High Bar
BNP Paribas noted that GE Vernova's performance was solid, prompting the company to raise its full-year guidance for contracted gas turbines to more than 130 gigawatts (GW), up from its previous forecast of over 125 GW. This adjustment was in line with buy-side expectations, the bank said.
New orders in the quarter were particularly strong, totaling 16.6 GW. A significant portion of this, 13 GW, came from slot conversions, where preliminary agreements become firm orders. This figure surpassed investor expectations, which were in the range of 10 to 12 GW.
Conversions and Costs Now in Focus
Despite the strong order intake, BNP Paribas analyst Moses Sutton wrote that the pace of future conversions will be the primary topic for investors over the next several quarters. The urgency is underscored by 62 GW of slot additions from late 2025 through mid-2026 that are approaching their conversion deadlines. According to the note, conversions will need to increase materially each quarter heading into the first half of 2027 to meet these timelines.
AdThe bank also highlighted a potential headwind from rising construction costs for new combined-cycle gas turbine plants, which are trending toward $4,000 per kilowatt. These increases, driven mainly by labor and engineering expenses, could introduce delays and regulatory risks for new projects.
Strategic Moves and Outlook
On the Electrification side of the business, GE Vernova recently acquired Trench Group, a specialist in high-voltage equipment. BNP Paribas said the deal adds $5 billion to the segment's $46.1 billion backlog and is expected to be accretive to margins.
BNP Paribas maintained its Neutral rating and a $1,090 price target on GEV stock. The bank's view is that the strong quarterly performance was largely priced in by the market, concluding that a flat to modestly higher share price reaction is reasonable as investors now weigh the future pace of order conversions.
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