Orsted: Suspends Dividend Through 2026; Cuts 2030 Guidance in Line With Our Estimate; Shares Cheap

No-moat Orsted has updated its business plan presented in June 2023 due to the massive impairments and cancellations of U.S. projects announced in the meantime. As we expected, the group is ruling out a rights issue. Instead, it will reduce its investments and costs and suspend the dividend in 2024 and 2025. We do not contend the latter as dividends have never been core in the equity story. The new investments and 2024, 2026, and 2030 EBITDA targets are in line with our estimates, so we confirm our DKK 540 fair value estimate, offering 40% upside to the current share price. The farm-down of the Hornsea 3 wind farm will be a positive catalyst. Furthermore, Orsted is less exposed to declining European wholesale power prices than most European utilities and will benefit from a decline in interest rates.