Be Julien, Not Vlad

See Vlad Sergievskiy’s stock call performance relative to the equal weighted index of the stock he covers. I am just putting out the facts!

Anyway, here comes Jefferies with the absolute dunk. Read the note from Julien Dumoulin-Smith from Jefferies; it perfectly lays out my exact point. Check out a couple of these key takeaways:

1. ‘Peak order’ talk is a red herring. Who cares? GEV is on track to be sold out through 2032 by the end of this year and will likely be booked out through the mid-2030s within the next 18 months. To argue that 2030 is ‘peak,’ the bears—like Vlad—have to believe there’s a massive demand and pricing cliff waiting. But with 2030+ already getting booked out right now, do they really believe that? I bet they won’t bet their balls on it.

2. Look at this beautiful exhibit. What do you see?

   1. I see US$18B in EBITDA for the GEV Power Division standalone—that’s roughly US$600M per gigawatt of simple-cycle turbine capacity. Extrapolating this to ENR yields €13-14B of EBITDA. While I’m currently modeling €4.6B in EBITA by 2028, these numbers highlight the massive potential. Getting to that US$18B GEV Power figure isn’t difficult: take 30GW of capacity, multiply by $1/watt at a 35% EBITDA margin (per their guidance), and you get $10.5B in Equipment EBITDA. Add US$25B in service revenue at a 30% margin ($7.5B), and—boom—that’s your $18B.

   2. I also see something else that gets me excited: the service revenue. Look at the ~14% CAGR for 2025-2030. Notice that the growth rate is accelerating? That growth will continue to accelerate into the 2030s as expanding large gas turbine capacity—at higher ASPs—moves into the service monetization phase. And remember, service revenue drops through at a 40-50% incremental margin.

   3. The growth percentage opportunity for ENR is even bigger because it has a smaller installed base but is adding a comparable amount of GW

3. Finally, this insight from a note earlier in the week—before they revised their numbers—really stood out: 2040 EBITDA is projected to be 49% higher than 2030 EBITDA, even with an 88% cut to equipment EBITDA!

Be Julien. Not Vlad.