Raymond James Downgrades GE Vernova and Primo Water

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

This decision comes after analysts at Raymond James perceived overextended gains for GEV, driven largely by excitement around AI and electrification-related developments, along with concerns over Primo Water’s post-merger integration challenges.

GE Vernova

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

The recent rally, fueled by investor enthusiasm for power demand related to AI and data centers, has pushed the stock’s valuation to what analysts consider an overstretched level. The trading multiple is currently sitting at 46 times projected 2025 earnings, elevated compared to industry peers.

Raymond James believes the current momentum may cool and suggests the stock needs a period of consolidation before it can be accurately reassessed.

Primo Water

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

With few immediate catalysts—no major buybacks or dividend hikes expected—the stock may struggle to sustain its previous momentum. The next 12 months are viewed as a period of elevated financial risk as Primo navigates the operational complexities of merging while reducing its debt burden.