Data center infrastructure provider Vertiv impressed Wall Street with its long-term outlook at an investor event on Monday. Vertiv stock jumped as it received a flurry of bullish reports on the news.
The Westerville, Ohio-based company held its investor event in Atlanta in conjunction with the SC24 high-performance computing conference. Vertiv exhibited its latest technology at the show.
Vertiv reaffirmed its targets for 2024 and provided a sales outlook for 2025 that was above consensus estimates.
The company also raised its long-term sales growth and profit margin targets through 2029. The company now expects revenue growth of 12% to 14% per year and 25% operating margins. Its prior targets were 8% to 11% sales growth and 20%-plus operating margins, Evercore ISI analyst Amit Daryanani said in a client note.
Vertiv also raised its regular annual cash dividend by 50% to 15 cents a share from 10 cents, to be paid quarterly.
Daryanani maintained his outperform rating on Vertiv stock with a price target of 150.
On the stock market today, Vertiv stock leaped 14.6% to close at 140.94. Earlier in the session, it hit an all-time high of 141.12.
Vertiv Stock Gets Price-Target Hikes
At least six Wall Street analysts raised their price targets on Vertiv stock after the investor event.
Oppenheimer analyst Noah Kaye reiterated his outperform rating on Vertiv stock and increased his price target to 131 from 121.
"Infrastructure bottlenecks (power availability, higher rack-density cooling requirements) appear in our view to be playing to Vertiv's competitive strengths," Kaye said in a client note.
Vertiv provides the electrical backbone and temperature management systems for data centers, including those running AI applications.
TD Cowen analyst Michael Elias kept his buy rating on Vertiv stock and upped his price target to 141 from 115.
"We view Vertiv's long-term guidance as the bull case scenario as it assumes no degradation in the hyperscale demand environment for a five-year period, to which we are skeptical," Elias said in a client note. "That said, we remain encouraged by demand strength heading into 2025 as our most recent channel checks suggest that hyperscale data center demand for at least three of the five major hyperscalers will be similar year on year in 2025, with one hyperscaler's demand set to accelerate."
Vertiv stock is on three IBD lists: IBD 50, Big Cap 20 and Leaderboard.
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