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Orsted A/S ORSTED

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Stock XCSE Rating as of
DKK 406.40 +14.60 (3.73%)
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Company Report

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Orsted Earnings: EBITDA in Line With Expectations; 2024 Guidance Confirmed; Shares Cheap

Tancrede Fulop

We confirm our DKK 540 fair value estimate after no-moat Orsted released first-quarter EBITDA in line with company-compiled consensus and confirmed its 2024 EBITDA guidance, but missed the bottom line because of a deferred tax liability. The current enterprise value/EBITDA of 9.2, despite the high upcoming earnings growth, reflects the material undervaluation of shares stemming from the overreaction to the 2023 US issues and overdone concerns about the execution risk of projects like Hornsea 3.

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Price vs Fair Value

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ORSTED is trading at a 25% discount.
Price
DKK 406.40
Fair Value
DKK 672.00
Uncertainty
Medium
1-Star Price
DKK 171.00
5-Star Price
DKK 539.00
Economic Moat
Xdlm
Capital Allocation
Srdkxzpy

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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Trading Information

Previous Close Price
DKK 391.80
Day Range
DKK 387.10–429.70
52-Week Range
DKK 248.00–679.60
Bid/Ask
DKK 405.70 / DKK 405.90
Market Cap
DKK 170.78 Bil
Volume/Avg
903,229 / 628,807

Key Statistics

Price/Earnings (Normalized)
8.40
Price/Sales
3.21
Dividend Yield (Trailing)
—
Dividend Yield (Forward)
—
Total Yield
—

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
Website
https://www.orsted.com

Competitors

Valuation

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Metric
ORSTED
IBE
RWE
Price/Earnings (Normalized)
 8.4012.4414.39
Price/Book Value
 2.911.370.77
Price/Sales
 3.211.600.85
Price/Cash Flow
 14.637.2934.97
Price/Earnings
ORSTED
IBE
RWE

Financial Strength

Metric
ORSTED
IBE
RWE
Quick Ratio
 1.020.600.67
Current Ratio
 1.370.771.58
Interest Coverage
 −3.354.982.96
Quick Ratio
ORSTED
IBE
RWE

Profitability

Metric
ORSTED
IBE
RWE
Return on Assets (Normalized)
 −2.42%4.79%3.84%
Return on Equity (Normalized)
 −10.60%14.40%14.38%
Return on Invested Capital (Normalized)
 −2.73%7.51%7.64%
Return on Assets
ORSTED
IBE
RWE
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