GE Vernova's Outlook Upgraded to Positive, 'BBB' Rating Maintained: Fitch

Fitch Ratings upgraded the outlook for GE Vernova Inc. from Stable to Positive and affirmed its Long-Term Issuer Default Rating (IDR) and senior unsecured debt rating at 'BBB'. The revised outlook reflects Vernova's growth in its Power and Electrification order book, positive demand trends, operational performance, and progress in margin expansion. According to Fitch's calculations, EBITDA margins are expected to continue advancing towards low double digits, and if Free Cash Flow (FCF) margins exceed 5%, the rating could be further upgraded.

Vernova's evolving operational profile predominantly generates high-margin service revenue from its extensive installed base, mainly in gas energy. The company is optimizing its cost structure while focusing on R&D, expecting a 20% increase by 2025. Gas turbines remain critical for meeting rising energy demand, even as renewable energy sources expand. Despite challenges in the wind segment, Vernova is increasing project selectivity and product standardization, which has improved terrestrial wind margins.