Ørsted (Hold, TP: DKK430.00) - Moody’s outlook cut to ‘negative’
Moody’s change in Ørsted’s credit outlook to ‘negative’ from ‘stable’ after the warned impairments of up to DKK16bn last week has added fuel to investor concerns related to the company’s willingness to invest in projects with low profitability and liquidity. Credit curves suggest that a potential downgrade could raise the company’s credit margin by ~25bp, increasing its WACC by ~10bp. This, in turn, would slightly lower our DCF-based valuation of Ørsted’s existing business and visible growth of DKK331/share by 2%, to ~DKK325/share.
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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