GE Vernova raises 2026 guidance as gas turbine backlog grows

GE Vernova (GEV) management lifted its 2026 revenue and free cash flow targets on July 22, 2026, following a period of consistent customer demand for gas turbines and data center power equipment. Over the year ending October 8, 2026, GE Vernova shares delivered a 60.1% return, significantly exceeding the 16.3% gain for the S&P 500.

At the time of the second-quarter 2026 report, the company held a backlog of signed but undelivered work valued at $176 billion. This figure increased by $13 billion from the previous quarter, with leadership indicating the total is on pace to hit $200 billion in 2027. Pricing for new business has also strengthened; management reported that gas power equipment orders placed in the first half of 2026 carried prices more than 20% higher than those recorded in the fourth quarter of 2025.

The firm is translating these orders into top-line growth at an accelerating rate. Revenue for the last twelve months expanded by 13.0%, up from an 8.5% increase in the prior year. Consequently, leadership adjusted its 2026 revenue outlook to a range of $45.5 billion to $46.5 billion, a $1 billion improvement over earlier projections. Profitability metrics have improved in parallel, with operating margins reaching 4.4% over the last twelve months, compared with 1.8% a year earlier and 0.4% two years ago.

Cash generation has benefited from customer deposits paid upon order placement, allowing GE Vernova to secure funding before revenue recognition. Citing strong order flow and these upfront payments, management raised its 2026 free cash flow guidance to $11.5 billion to $12.5 billion, up from a previous range of $6.5 billion to $7.5 billion.

Despite these operational improvements, GE Vernova’s profitability remains modest relative to the broader market. Its 4.4% operating margin trails the S&P 500’s 18.5%, yet the stock trades at a premium valuation of 6.5 times sales compared with the index’s 3.0 times. This pricing suggests investors expect the company to realize significantly higher margins as it fulfills its current backlog.

The wind segment has not experienced similar momentum. Wind orders declined by 40% in the second quarter of 2026, during which the division recorded a loss of $275 million before interest, taxes and depreciation (EBITDA). Leadership noted that timing for a recovery in U.S. wind demand remains uncertain. For the third quarter of 2026, the company projects Wind EBITDA will be near break-even; if actual results align with this estimate, the division’s EBITDA losses will shrink from the $275 million reported in the prior quarter.