This week, we're taking a closer look at Ørsted. Despite challenges in the last few years, we now argue Ørsted is back on the right path. We rate the stock a BUY, and set a 12-month TP of DKK 450/sh.
Q1e: results before amortisation of NOK 1.17bn and solvency ~191%. Estimates up slightly on AUM and more profit sharing (Sweden). Earnings growth and SBB key focus; BUY, NOK TP 125 (120).
This week , we provide some insight into the marginal pricing of electricity markets in Europe, as well as calculation details and a simple calculator where investors can enter their own assumptions.
We expect strong Q1 reports and bullish management teams. Oil price assumptions up, near-term gas price slightly down. Best risk/reward in AKRBP, VAR, IPC, TGS, ODL, DOFG and SUBC.
Steady production, high oil/gas prices. '24e and '25e EPS down ~11% due to lower gas price assumptions. We stick to SELL, TP to NOK 275 (250) on more bullish LT oil price.
Quality downgrades partly offset stronger spot prices, so our Q1 estimates are up only 3% ahead of the trading updates. Consensus a tad optimistic – we are still 6% below on Q1 EBIT.
We expect EBIT of NOK 783m, -6% vs consensus. Key risk is prices (i.e., downgrade share and trout volume). Attractive at '24e-'25e P/E of 10x-9x. BUY, TP of NOK 59.
Of our basket of 41 stocks, returns were positive for 33 and negative for 8 over the week. Median performance 4.1%, average 9.9%. Sub-sectors: Wind (3%), Solar (7%), Hydrogen (7%), Cleantech/other (2%).