Bernstein SocGen Group Starts Vertiv (VRT) at Outperform, $416 PT

Bernstein SocGen Group analyst Varun Govindaraj initiates coverage on Vertiv (NYSE: VRT) with a Outperform rating and a price target of $416.00.

The analyst commented, "The company makes data center power and cooling equipment, arguably the only pure-play with scale; Stock has been a major outperformer, up between 25 – 30x over the last 3 years. We’re materially ahead of the sell side on earnings estimates (~15% ahead on FY28 revenues). Most of this is driven by divergence in the topline, although we broadly agree with the street on margin expectations (with incremental margins in the mid 30s). Four factors contribute to our belief here; (i) evolution of power / cooling tech. where VRT sits on the bleeding edge, (ii) addition of capacity to help convert backlog AND attract orders, (iii) increased cost of failure favoring incumbents like Vertiv, (iv) and the ever-increasing usage of / demand for AI models. Model efficiency growth is the main longer-term “watch out”. If models get too efficient, the risk is that they just need less power / cooling for the same outcomes. We’ll publish more on this in the future. We do believe that the stock will eventually down-rate to multiples of ~15-20x seen in service-heavy businesses; we remain comfortable that even if this happens by 2030, Vertiv’s robust earnings power can still drive an attractive baseline price."

For an analyst ratings summary and ratings history on Vertiv click here. For more ratings news on Vertiv click here.

Shares of Vertiv closed at $300.57 yesterday.

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