Raymond James Downgrades GE Vernova and Primo Water

Raymond James has downgraded both GE Vernova and Primo Water to “market perform” from “outperform” after assessing the recent performance and future outlook of these companies.

This decision comes as analysts at Raymond James believe that GE Vernova has experienced overextended gains mainly fueled by excitement surrounding AI and electrification developments, along with concerns regarding the post-merger integration challenges faced by Primo Water.

GE Vernova, which was spun off from General Electric six months ago, has seen its stock soar by 94% since the spinoff, largely due to its strategic position in AI-driven infrastructure modernization. However, the rally, spurred by investor enthusiasm for power demand linked to AI and data centers, has resulted in a stock valuation that analysts now consider overstretched. The company’s high trading multiple, currently at 46 times projected earnings for 2025, is viewed as elevated compared to industry peers. Analysts suggest that the current momentum may slow, indicating that a consolidation period is necessary before accurately reassessing its trajectory.

On the other hand, Primo Water is facing distinct challenges. Although the recent merger with BlueTriton positions the company for potential growth, analysts anticipate a difficult path ahead, primarily due to the complexities involved in integrating the two companies and a focus on reducing debt. With no significant catalysts on the horizon—such as major buybacks or dividend increases—the stock may find it hard to sustain its previous momentum. Analysts foresee the next 12 months as a period of heightened financial risk for Primo Water as it navigates the operational difficulties of the merger while working to decrease its debt load.