Orsted: Sanctions Hornsea 3 as We Expected, Shares Undervalued

No-moat Orsted sanctioned the giant 2.9 gigawatts U.K. offshore wind farm Hornsea 3. This does not come as a surprise to us since the last U.K. autumn statement made capital allowances (tax deductibility of investments) permanent whereas they were supposed to expire in 2026 previously. Still, this decision is good news as the other option would have been to scrap the project, which would have driven a material impairment on top of the U.S. ones. We confirm our fair value estimate of DKK 540, still offering a nice upside after the 48% rebound since early November.