Ørsted (Sell, TP: DKK474.00) - Profitability and capital structure likely to be in focus at CMD
We expect focus at the CMD on 8 June to remain on: challenges to profitability in the sector; and funding of the company’s targeted growth with higher capex and likely lower proceeds from farm-downs, partly offset by higher operating cash flow. We believe Ørsted will need to take on more debt and/or be more active in farm-downs to avoid having to raise equity. We still consider the valuation stretched, with the stock trading 81% above our estimated value of its existing business and visible growth, and reiterate our SELL and DKK474 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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