Ørsted - Initiation of coverage - Too much growth priced in
Despite Ørsted’s prime position in offshore wind and onshore renewables, we expect industry-wide headwinds (inflation, rising interest rates, competition, value-chain issues) to hamper the profitability of growth. Moreover, multiples are still above historical levels even after the renewables sell-off from the 2021 peak, which we believe is unwarranted given the industry concerns and elevated interest rates. We consider Ørsted’s valuation stretched, and initiate coverage with a SELL and DKK470 target price. Ørsted was trading 75% above our value for its existing business and visible growth (DKK334) at yesterday’s close.
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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