Morgan Stanley has revised its price target for Vertiv Holdings Co (VRT, Financial), reducing it from $140 to $125. Despite this adjustment, the firm has maintained its Overweight rating on the stock. The decision comes in the wake of updated estimates and a re-evaluation of market multipliers following a notable derating predicted to begin in early 2025.
Vertiv has reported $2.6 billion in quarterly orders across the last twelve months, aligning with the market's revenue projections for 2026. This strong performance suggests that the company can meet these future estimates without needing to grow its orders further or dip into its backlog, according to the analyst.
The revised price target reflects updated outlook and market conditions, yet underscores confidence in Vertiv's ability to meet long-term forecasts based on current performance metrics.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 20 analysts, the average target price for Vertiv Holdings Co (VRT, Financial) is $115.67 with a high estimate of $146.00 and a low estimate of $90.00. The average target implies an upside of 48.29% from the current price of $78.00. More detailed estimate data can be found on the Vertiv Holdings Co (VRT) Forecast page.
Based on the consensus recommendation from 24 brokerage firms, Vertiv Holdings Co's (VRT, Financial) average brokerage recommendation is currently 1.9, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Vertiv Holdings Co (VRT, Financial) in one year is $53.72, suggesting a downside of 31.13% from the current price of $78. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Vertiv Holdings Co (VRT) Summary page.
VRT Key Business Developments
Release Date: April 23, 2025
- EPS: Up 49% to $0.64, driven by increased AOP.
- Organic Net Sales: Increased by 25%.
- Book-to-Bill Ratio: 1.4 times in Q1.
- Trailing 12-Month Organic Orders Growth: 20%.
- Adjusted Operating Profit: $337 million, up 35% from prior year.
- Adjusted Free Cash Flow: $265 million, up 162% year-on-year.
- Net Leverage: 0.8 times.
- Adjusted Operating Margin: Expanded by 130 basis points.
- Full Year Sales Growth Guidance: Raised to 18%.
- Adjusted Operating Margin Guidance: Reduced to 20.5% at the midpoint due to tariffs.
- Adjusted Diluted EPS Guidance: Maintained at $3.55 at the midpoint.
- Backlog: Expanded to $7.9 billion, up $1.6 billion year-over-year.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Vertiv Holdings Co (VRT, Financial) reported a strong first quarter with EPS up 49% to $0.64, driven by increased adjusted operating profit.
- Organic net sales grew by 25%, indicating that the company is outperforming market growth.
- The company achieved a book-to-bill ratio of 1.4 times, reflecting strong demand and order growth.
- Adjusted free cash flow was $265 million, up 162% year-over-year, showcasing strong cash generation.
- Vertiv Holdings Co (VRT) raised its full-year sales growth guidance to 18%, demonstrating confidence in continued market demand.
Negative Points
- The tariff situation remains fluid and poses a significant challenge, with potential negative impacts on operating margins.
- EMEA region's growth lagged behind the Americas and APAC, primarily due to slower AI infrastructure build.
- The company faces uncertainty in mitigating the impact of tariffs, which could affect profitability.
- There is a potential headwind for free cash flow in the next quarter due to accelerated collections in Q1.
- Despite strong performance, the company has not engaged in share repurchases, raising questions about capital allocation priorities.
