Vestas Wind Systems (Buy, TP: DKK232.00) - Margins on the right track
Q3 was strong overall, with Power Solutions’ profitability (and ASP) moving in the right direction. The 2023 EBIT margin guidance was increased despite a somewhat lowered Service margin, implying a stronger Power Solutions margin. We have raised our 2023–2024e adj. EBIT by c5% on average, while we have reduced our 2025e by c5%, as we have become more cautious on offshore wind (not related to Q3 specifically). We still believe the worst is behind Vestas, as the price/cost dynamic has improved, which should boost profitability. We reiterate our BUY and DKK232 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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