J.P. Morgan: GE Vernova orders surge and high-voltage transmission push supports JPMorgan’s positive view on Asian power equipment

Where did the third-quarter outperformance come from?

GE Vernova’s third-quarter adjusted EBITDA was 1.94 billion dollars, above JPMorgan’s forecast of 1.63 billion dollars and the market consensus of 1.68 billion dollars; revenue was also 5% above the bank’s forecast.
New orders reached 29.3 billion dollars, up 96% organically year over year; the order backlog reached 196.7 billion dollars, up 20 billion dollars from the previous quarter. The company expects the backlog to exceed 200 billion dollars in the fourth quarter, having previously targeted that level at some point in 2027.
The Power business was the main source of order growth: third-quarter orders rose 178% year over year, with both volume and pricing for gas power equipment and services contributing. The company raised its full-year organic revenue growth guidance for Power from 18%–20% to 19%–21%, and its EBITDA margin guidance from 17%–19% to 19%–21%.

Electrification revenue grew 16% organically year over year in the third quarter, driven by substations, ultra-high-voltage direct current transmission equipment and switchgear; its EBITDA margin was 19.1%, up 4.7 percentage points year over year. Management attributed the improvement to volume, productivity and favorable pricing.
However, the business’s quarterly orders fell 9% organically year over year. Management said the main reason was that the same period in 2025 included a 1.6 billion-dollar order for synchronous condensers in Saudi Arabia; cumulative orders for the first three quarters of 2026 still grew 39% organically.
Management said prices for transmission products such as switchgear and synchronous condensers continued to strengthen, while high-voltage direct current equipment prices remained at a high level after rising sharply in 2023–2024. HD Hyundai Electric and LS Electric also said prices continued to rise in the third quarter, leading JPMorgan to expect power equipment companies’ margins to keep expanding.

GE Vernova has agreed to acquire high-voltage grid component supplier Trench for 9 billion dollars, financed half with cash and half with debt, with completion expected by the end of 2027. The price equals 13 times Trench’s projected 2028 adjusted EBITDA, before synergies.
Trench’s components, including bushings and instrument transformers, can be used in transformers and other high-voltage equipment. GE Vernova management hopes in-house sourcing will shorten production cycles and improve production visibility; the components themselves have long lead times.
Management expects the global serviceable market for high-voltage transmission to grow from approximately 90 billion dollars in 2025 to approximately 130 billion dollars in 2030, a compound annual growth rate of about 8%. It cited added power generation capacity, data centers, grid upgrades and renewable energy grid connections as sources of demand.

JPMorgan believes GE Vernova’s orders, pricing and acquisition activity help ease investor concerns that the power equipment cycle is ending; the bank expects high-voltage transformer demand to grow by about 10% annually over the next 3–4 years.
After a marked pullback in Asian electrical equipment stocks in the third quarter, South Korean high-voltage equipment makers are valued at roughly 9 times projected 2028 enterprise value to EBITDA, below the 13 times implied by the Trench transaction. The bank sees some Korean equipment stocks that have fallen as attractive.