From Morningstar:

Danish wind turbine maker, Vestas, defied expectations in November by reporting higher-than-expected revenue and turned a profit in the third quarter, boosting shares by 8%. Large orders announced in the fourth quarter have increased expectations for the full year earnings.

Analysts anticipate a blockbuster quarter for Vestas with a forecast of 7.6GW of orders, signifying significant growth compared to the previous quarter. The company also secured its largest order ever in the U.S., a 1.1 GW order.

While offshore wind developers have struggled, Vestas has benefited from rising interest costs and supply chain disruption, with higher-priced turbine delivery. Profitability is expected to trend higher and remain in positive territory due to higher turbine selling prices.

Morningstar’s analyst maintained Vestas’ fair value estimate of 197 Danish kroner following the group’s strong third-quarter results. Revenue is forecasted to grow by 6% in 2023, with double-digit pricing growth for onshore turbines and a 10% increase in service revenue.

Key Morningstar Metrics for Vestas Stock:

• Fair Value Estimate: 197 DKK;
• Current Price: 191.84 DKK;
• Morningstar Rating: ★★★;
• Morningstar Economic Moat Rating: None;
• Morningstar Uncertainty Rating: High.

The analyst forecasts a revenue growth of 6% in 2023 to €15.4 billion (£13.16 billion), driven by double-digit pricing growth for onshore turbines and a 10% increase in service revenue. With Vestas shares trading around 192 Danish kroner, they are considered fairly valued in comparison to the fair value estimate of 197 Danish kroner.



Read more: Going into Earnings, is Vestas a Buy, Sell or Hold?