Vestas Wind Systems (Hold, TP: DKK460.00) - Earnings growth capped by steel
We are 7% below consensus on EBIT ahead of the Q3 results (due 08:30CET on 7 November) due to ASP declines, but we expect the current guidance to be reiterated. We have made marginal estimate changes, with strong order intake mitigated by lower ASP. We reiterate our HOLD recommendation but have cut our target price to DKK460 (470) on peer de-rating and as we still forecast no EBIT growth in 2018–2020 due to higher steel prices and ASP declines.Vestas Wind Systems is an industrial machinery and equipment manufacturing company based in Denmark. Co. is engaged in the production of wind turbines. Co.'s main activities comprise development, manufacture, sale, marketing and maintenance of installations that use wind energy to generate electricity. Co. supplies products, from individual turbines to the delivery of turnkey wind power installations globally. Co. supplies guidance services to its customers in connection with the development, financing and ownership of wind turbine projects. Co.'s main customers are utilities and energy companies.
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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