Morgan Stanley has begun coverage of Innio N.V., assigning the industrial-engine manufacturer an "overweight" rating and setting a price target of $47. That target implies roughly 26% upside from the stock's June 26 closing price of $37.29, according to the note.
The broker described Innio as "a key player in on-site power for data centers," and said the company's reciprocating engines are "among the most attractive solutions for the market." Morgan Stanley noted that Innio, one of the largest global makers of high-speed reciprocating natural gas engines, had an installed base of 44 gigawatts at year-end 2025.
Within the note, Morgan Stanley singled out the company's Jenbacher brand, saying it is "well known in the engine industry and has been trusted by numerous customer verticals including regulated utilities." The firm used this brand recognition and installed base as part of its reasoning for a constructive rating.
On the financial side, Morgan Stanley set out a detailed multi-year forecast. The bank projects a revenue compound annual growth rate of 24% and an EBITDA compound annual growth rate of 36% for 2026 through 2030. Shipments are forecast to expand from 4.6 gigawatts to 9.2 gigawatts over that period, with 5.7 gigawatts of the 2030 deliveries expected to serve the data center market.
The $47 price target corresponds to valuation multiples of 28 times 2028 EV/EBITDA and 14.9 times 2030 EV/EBITDA under Morgan Stanley's base case. The broker derived the target using an unlevered discounted cash flow analysis that assumes a 17% revenue CAGR through 2035, a weighted average cost of capital of 9.3%, and a terminal growth rate of 2.5%.
Morgan Stanley also presented scenario values. The bull case places the stock at $76, implying 19.5 times 2030 EBITDA, while the bear case values it at $26, implying 12.1 times 2030 EBITDA.
The note observed that the stock has risen about 40% since Innio's initial public offering at $27. Morgan Stanley added that "the market is still not fully appreciating the growth outlook, [and the company's] ability for the company to maintain engine leadership in the market."
Innio reported total revenue of $2.64 billion for 2025, comprised of $1.365 billion in equipment sales and $1.27 billion in services, and adjusted EBITDA of $549 million, representing a 20.8% margin, the note said. Equipment order intake increased markedly to $3.884 billion in 2025 from $1.350 billion in 2024.
The broker identified several catalysts that could influence the company's trajectory: announcements of data center projects, quarterly booking and price trends, and progress on expanding manufacturing capacity.
It also listed key risks, including temporary power and stranded-asset risk, growing local community pushback on data center power, intensifying competition, and sponsor share overhang.
Finally, Morgan Stanley noted that Innio priced an upsized initial public offering of 90 million common shares at $27.00 per share, consisting entirely of secondary shares.
Context and implications
The broker's initiation combines valuation work with operational forecasts tied closely to shipment growth and the data center segment's adoption of on-site reciprocating engines. The financial assumptions underpinning the price target are explicit - most notably the revenue and EBITDA CAGRs for 2026-2030 and the DCF inputs used to extend projections through 2035.