Missed the GE Vernova Surge? This Peer Stock Looks Ready to Rise.

Investors who like the GE Vernova story might want to look into shares of Siemens Energy. (Liesa Johannssen-Koppitz/Bloomberg)

GE Vernova has become a Wall Street darling and a core holding for anyone looking to play the trend of accelerating growth in demand for electricity driven by the rapid spread of artificial-intelligence computing. But it isn’t the only option.

One of them is a close peer to GE Vernova: Siemens Energy , which trades in Europe under the symbol ENR. Its U.S.-listed American depositary receipts trade as SMNEY .

The “energy, nuclear, grid bull thesis [is] as strong as ever,” wrote Mizuho’s tech media and telecom strategist Jordan Klein on Monday, noting that GE Vernova stock rose 17% after the company reported its second-quarter earnings this past week. Klien reminded investors that Siemens Energy was the “European version of GE Vernova,” calling it a much less expensive way to benefit from rising demand for energy.

Like GE Vernova, Siemens Energy makes natural-gas turbines for power generation, electricity-grid technologies, and wind turbines.

Both stocks have been on fire. Coming into Monday trading, GE Vernova stock was up 24% over the past month, up 96% year to date, and up 272% over the past 12 months. The respective gains for Siemens Energy were 4%, 92%, and 281%.

Although both have rallied, the stocks don’t trade for similar valuations.

Estimates for GE Vernova’s 2027 earnings before interest, taxes, depreciation, and amortization, or Ebitda, have risen to about $7 billion from $4 billion since the company was spun out of GE Aerospace in April 2024, according to FactSet. That leaves GE Vernova stock trading for about 24 times estimated 2027 Ebitda. Siemens Energy stock trades for about 12 times.

Despite the discount, the outlook for Siemens Energy has improved. Estimates for its 2027 Ebitda have risen to roughly $7.5 billion from $4 billion over the past 16 months. What’s more, Siemens Energy is expected to grow earnings per share at about 50% a year for the next two years. That compares favorably with the projected 55% rate for GE Vernova, based on analyst estimates compiled by FactSet.

The recent gains for GE Vernova led Mizuho analyst Maheep Mandloi to downgrade shares to Hold from Buy on Monday. His target price, however, jumped to $670 from $412. In April 2024, Mandloi launched coverage of the stock with a Buy rating and $154 price target shortly after it spun out of GE Aerospace. The target price has risen more than fourfold over the past 16 months.

Mandloi doesn’t cover Siemens Energy. Investors considering lightening up on their GE Vernova positions, based on his advice, might want to give GE Vernova’s European peer a look.

No two companies, of course, are exactly the same. No two regions are the same, either. Investors matter, too. The S&P 500 trades for almost 23 times estimated earnings expected over the next 12 months. The German DAX index trades for about 16 times.

The 30% discount on German stocks being offered to the U.S. is another thing for investors to consider when looking at Siemens Energy. Its valuation might never catch GE Vernova, but the shares still could be an opportunity.

Siemens Energy ADRs fell 3.9% in Monday trading. Many German stocks were weak. The DAX Index fell 1% after the U.S. and EU announced a trade deal on Sunday. GE Vernova stock rose 0.4%, despite catching two Wall Street downgrades. The S&P 500 finished flat and the Dow Jones Industrial Average fell 0.1%.

Write to Al Root at allen.root@dowjones.com