Fortum : Are we nearing the end of the low-price paradigm in Nordics?
The Nordic electricity system is entering a phase of lasting change: demand is growing structurally (electrification, data centres), while controllable supply is stagnating, and variable renewables are dominating growth. Based on the analysis developed in this note, these changes are set to drive long-term price growth that is not yet reflected in the consensus. This shift could be addressed at the CMD on 25 November. Fortum, with its low-carbon mix (hydro + nuclear), deleveraged balance sheet and high price sensitivity (˜ +4% EPS per € 1/MWh), looks particularly well positioned to benefit from this. Nevertheless, we think it is still too early to take a more aggressive stance on the stock: premium to sector index of 40% and 2025e and 2026e at the bottom of the wave. Neutral rating maintained but target price raised to € 19 (vs € 15).Fortum is an energy company. Co.'s operations are organised in five divisions: Hydro Power and Technology and Nuclear and Thermal Power, which are engaged in its hydro, nuclear and thermal power generation, services, portfolio management and trading as well as technology and research and development functions; Heat, Electricity Sales and Solutions, which consists of Co.'s combined heat and power production, district heating and business-to-business heating solutions, solar business, electricity sales and related customer offering; Russia, which consists of power and heat generation as well as heat distribution in Russia; and Distribution, which focuses on distribution activities in Sweden.
Oddo Securities provides securities brokerage and research services. The company offers equity, economic, and derivatives research and credit analysis services. It focuses on insurance, automotive, building materials, pharmaceuticals, telecommunications, information technology, and agri-food industries.
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