Raymond James downgrades GE Vernova, Primo Water

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Investing,com -- Raymond James has downgraded both GE Vernova (NYSE:GEV) and Primo Water (NYSE:PRMW) to "market perform" from "outperform" after an evaluation of the companies’ recent performance and future outlook.

This follows what analysts at Raymond James see as overextended gains for GEV, driven largely by excitement around AI and electrification-related developments, as well as concerns about Primo Water’s post-merger integration challenges.

GE Vernova, which was spun off from GE just six months ago, has seen a 94% stock gain since the spinoff, benefiting from its positioning as a key player in AI-driven infrastructure modernization.

This rally, fueled by investor enthusiasm for power demand related to AI/data centers, has pushed the stock’s valuation to a level analysts consider overstretched.

The company’s high trading multiple, sitting at 46 times projected 2025 earnings, is seen as elevated when compared to its industry peers.

Raymond James believes the current momentum may cool, suggesting the stock needs a period of consolidation before its trajectory can be more accurately reassessed.

Primo Water faces a different set of concerns. The company's recent merger with BlueTriton has positioned it for potential growth, but Raymond James anticipates a challenging road ahead, marked by the complex integration of the two companies and an expected focus on deleveraging.

With limited immediate catalysts—no major buybacks or dividend hikes expected—the stock may struggle to maintain its previous momentum.

The analysts view the next 12 months as a period of elevated financial risk as Primo works through the operational complexities of merging the two entities while reducing its debt burden.