Key insights
- BofA raised its price target on Vertiv (VRT) to $330 based on strong data center demand and increased construction spending. Vertiv's decision to limit order reporting raises some investor concerns. The company is expanding its Ohio facilities to boost production of thermal management systems for AI, signaling continued growth. While the stock appears overvalued, strong industry trends support a bullish outlook.
Investing.com - BofA Securities raised its price target on Vertiv Holdings Co. (NYSE:VRT) to $330 from $277 while maintaining a Buy rating on the stock.
The firm increased its price objective by $53 based on 30 times its 2027 adjusted EBITDA estimate, up from a previous multiple of 25 times, to reflect improved industry trends.
Vertiv will no longer report quarterly orders and will only disclose annual backlog in its 10-K filing. After fourth-quarter 2025 orders growth of 252% year-over-year, investors raised concerns about a potential decline in first-quarter 2026.
Industry data indicates US data center construction starts in January and February totaled $36.9 billion versus $1.4 billion in the same period of 2025, according to ConstructConnect. The pipeline of projects expected to start within the next six months totaled $70.8 billion.
US data center construction spending re-accelerated to 31% year-over-year to a $47 billion annualized pace per Census data. BofA’s target multiple represents a premium to the 19 times peer average on 2026 estimates, given above-peers earnings growth expectations. The stock has surged 324% over the past year to $295.11, trading near its 52-week high of $297.56. According to InvestingPro analysis, Vertiv appears overvalued relative to its Fair Value calculation, placing it among stocks on the Most Overvalued list. Investors can access deeper insights through VRT’s comprehensive Pro Research Report, available for this and 1,400+ other US equities.
In other recent news, Vertiv Holdings Co. announced plans to invest approximately $50 million to expand its headquarters in Westerville, Ohio, and its manufacturing facility in Ironton, Ohio. This expansion is expected to create up to 730 jobs by 2029, with 210 positions in Westerville and 520 in Ironton. The investment aims to boost production of thermal management systems for AI and traditional compute workloads. Additionally, Vertiv plans to increase its manufacturing capacity in the Americas with new facilities in South Carolina, focusing on infrastructure technologies like complete power modules and SmartRun.
Evercore ISI has reiterated an Outperform rating for Vertiv, maintaining a price target of $280, highlighting the company’s capacity expansion efforts. Conversely, Jefferies downgraded Vertiv to Hold from Buy, citing valuation concerns and adjusting the price target to $260. However, Jefferies raised its 2027 estimated organic growth to 18%. Meanwhile, HSBC initiated coverage on Vertiv with a Buy rating and a price target of $325, emphasizing the company’s role in AI data center growth. These developments reflect significant strategic moves and analyst perspectives regarding Vertiv’s market position and future potential.
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