Ørsted (Hold, TP: DKK375.00) - Good, but not enough
In line with our expectations, Ørsted’s strategic plans featured lower growth, more extensive farm-downs, a dividend halt for 2023–2025, and no new equity. While this should leave the company better capitalised, it was not enough to avoid a credit rating downgrade by S&P from BBB+ to BBB. As the company still has an investment grade rating and more robust growth plans than before, we do not expect a material negative effect. However, we believe it could result in slightly higher financing costs and somewhat lower proceeds from farm-downs. We reiterate our HOLD and DKK375 target price.
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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