GE Vernova (GEV +0.48%) stock surged 5.9% in Tuesday's after-hours trading following the global energy-focused company's announcement that it was increasing its 2025 free cash flow outlook, significantly raising its longer-term guidance, doubling its dividend, and increasing its share buyback authorization.
Yes, that's a lot of good news at once. Before we move on, it's worth noting that for those unfamiliar with the company, it operates in three segments: power, wind, and electrification. GE Vernova was formed in April 2024 when General Electric completed its split into three separate companies.
The electric grid in the U.S. (and other countries) needs major upgrades and expansion to support the soaring energy demands from artificial intelligence (AI).
Guidance for 2025, 2026, and "by 2028"
For 2025, GE Vernova reaffirmed its revenue and adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) margin guidance, and raised its free cash flow outlook. It also issued 2026 guidance. Lastly, it raised its outlook for "by 2028." Investors were likely particularly pleased with the increase in longer-term guidance.
CFO Ken Parks said that the company's "large and growing backlog, with healthy margins from services and better equipment pricing, is furthering our momentum into 2026 and driving our increased outlook by 2028."
| Metric | 2025 Guidance | 2026 Guidance | Outlook by 2028 |
|---|---|---|---|
| Revenue | $36 billion to $37 billion | $41 billion to $42 billion | $52 billion; low double-digit percentage organic growth (Up from $45 billion; high single-digit percentage organic growth) |
| Adjusted EBITDA margin | 8% to 9% | 11% to 13% | 20% (Up from 14%) |
| Free Cash Flow | $3.5 billion to $4 billion (up from $3.0 billion to $3.5 billion) | $4.5 billion to $5.0 billion | $22 billion-plus cumulative 2025 to 2028 (Up from $14 billion-plus) |
Data source: GE Vernova. Organic growth excludes contributions from acquisitions made within the past year.
Investors should note that all outlooks exclude the impact of GE Vernova's acquisition of the remaining 50% stake of Prolec GE, which is expected to close by mid-2026, subject to customary regulatory approvals. This $5.3 billion deal was announced in October.
Prolec GE, currently a 50%-50% joint venture between GE Vernova and Mexico's Xignux, is a leading supplier of power transformers for electric grids. This was a smart move by GE Vernova, as the acquisition is expected to be accretive to its earnings and accelerate the growth of its electrification segment, which is already its fastest-growing segment. This is an attractive market, with growth primarily driven by the need for grid upgrades to support the surge in power requirements of artificial intelligence (AI) data centers.
NYSE: GEV
Key Data Points
Dividend doubling
GE Vernova board of directors declared a $0.50 per share quarterly cash dividend, which is double its current dividend of $0.25. The new dividend is payable on Feb. 2, 2026, to shareholders of record as of Jan. 5, 2026.
At GE Vernova stock's closing price on Tuesday, its dividend yield was 0.16%.
Increase in share buyback authorization
The company's board of directors also approved an increase in share repurchase authorization to $10 billion, up from the prior authorization of $6 billion. GE Vernova has spent $3.3 billion of the authorization as of Dec. 3. So, it now has $6.7 billion left on the authorization.
CFO Parks commented that the company is "committed to maintaining an investment grade balance sheet as we make organic investments, pursue targeted M&A [mergers and acquisitions], and return at least one third of cash generation to shareholders through our higher dividend and increased share repurchase program."
A very attractive stock
GE Vernova stock was already attractive, as I outlined in my October article, "2 Electric Grid Stocks to Buy as Soaring Artificial Intelligence (AI) Demand Drives Surging Electricity Demand." (The other stock featured in this article is Quanta Services.) Tuesday's news makes GE Vernova stock even more attractive.
