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Orsted A/S ORSTED

Morningstar Rating
DKK 384.40 +9.60 (2.56%)
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Company Report

European Utilities Sell Off in Q1 on Falling Power Prices; RWE, SSE, Centrica, and Orsted Top Picks

European utilities have reversed their outperformance in the fourth quarter of 2023 because of a fall in wholesale power prices in the wake of gas prices after a very mild winter, and a pickup in interest rates due to inflation receding more slowly than expected. The former led to some of the companies, most exposed to power prices, cutting their guidance for 2024.

Price vs Fair Value

ORSTED is trading at a 30% discount.
Price
DKK 377.30
Fair Value
DKK 125.00
Uncertainty
Medium
1-Star Price
DKK 885.00
5-Star Price
DKK 921.00
Economic Moat
Nxlf
Capital Allocation
Djqggvjf

Bulls Say, Bears Say

Bulls

The hike of the ceiling price for 2024 U.K. offshore wind auctions and the extension of capital allowances are positive for the largest offshore wind market in the world, outside of China, where Orsted is the leader. The capital allowances will increase the value creation of Hornsea 3.

Bears

The business plan presented in Feb. 2024 hinges on material divestment including the farm-down of Hornsea 3. Failing to deliver them could force Orsted to resort to a rights issue.

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News

Trading Information

Previous Close Price
DKK 374.80
Day Range
DKK 372.80387.40
52-Week Range
DKK 248.00679.60
Bid/Ask
DKK 384.90 / DKK 385.30
Market Cap
DKK 161.54 Bil
Volume/Avg
469,077 / 663,400

Key Statistics

Price/Earnings (Normalized)
7.75
Price/Sales
2.34
Dividend Yield (Trailing)
3.51%
Dividend Yield (Forward)
Total Yield
3.51%

Company Profile

Danish company Orsted was named Dong Energy until the sale of all its oil and gas fields to Ineos in 2017, soon after the May 2016 initial public offering. Orsted is now focused on renewable assets, especially offshore wind farms. It operated 8.9 gigawatts of offshore wind farms at the end of 2023. The United Kingdom is the biggest country of operation, ahead of Germany and Denmark. The group intends to develop its footprint outside Europe with projects in Taiwan and in the U.S. Orsted also operates 4.8 GW of onshore wind and solar assets concentrated in the United States. The company is also involved in more traditional utilities business like conventional power plants and gas supply, but these activities are noncore.
Sector
Utilities
Industry
Utilities - Renewable
Stock Style Box
Large Growth
Total Number of Employees
8,905

Competitors

Valuation

Metric
ORSTED
RWE
SSE
Price/Earnings (Normalized)
7.7518.7210.46
Price/Book Value
2.840.742.23
Price/Sales
2.340.821.54
Price/Cash Flow
14.2033.757.59
Price/Earnings
ORSTED
RWE
SSE

Financial Strength

Metric
ORSTED
RWE
SSE
Quick Ratio
1.050.670.74
Current Ratio
1.421.580.91
Interest Coverage
−3.832.962.78
Quick Ratio
ORSTED
RWE
SSE

Profitability

Metric
ORSTED
RWE
SSE
Return on Assets (Normalized)
−2.04%3.84%6.38%
Return on Equity (Normalized)
−8.73%14.38%21.19%
Return on Invested Capital (Normalized)
−2.27%7.64%9.72%
Return on Assets
ORSTED
RWE
SSE
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Utilities - Renewable Industry Comparables

Ticker
Name
Morningstar Rating for Stocks
Capital Allocation
Economic Moat
Market Cap
CEG
Constellation Energy CorpZbwzw$58.3 Bil
OEZVY
Verbund AG ADRVbb$26.0 Bil
OEZVF
Verbund AG Class AYhpj$26.0 Bil
DNNGY
Orsted A/S ADRGxhwy$23.5 Bil
DOGEF
Orsted A/SLqkdm$23.4 Bil
EBR
Centrais Eletricas Brasileiras SA ADRYglv$19.2 Bil
EBR.B
Centrais Eletricas Brasileiras SA ADRHybh$19.2 Bil
CEZYY
CEZ a.s ADRWjc$19.2 Bil
BEP
Brookfield Renewable Partners LPWfrkstksrGtmdv$6.6 Bil
BEPC
Brookfield Renewable Corp Ordinary Shares - Class A (Sub Voting)VjqdqgdnJgdj$4.4 Bil

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