Orsted: Eversource Deal With GIP Bodes Well for Future Farm-Downs, Shares Undervalued

We confirm our DKK 540 fair value estimate for no-moat Orsted after its partner, Eversource Energy, announced on Feb. 13 that it agreed to sell its stake in two U.S. offshore wind projects it co-owns with Orsted to Global Infrastructure Partners, or GIP, for $1.1 billion. After multiple investments late in 2023 in U.K. offshore wind by Masdar, the clean energy subsidiary of the Abu Dhabi sovereign fund, the GIP deal confirms that financial players are still attracted by offshore wind assets despite the headwinds the industry faced since 2022. This bodes well for Orsted's future farm-downs that buttress its investment plan. All in all, shares look attractive.