Analyst Note| Matthew Donen, CFA |
No-moat Vestas’ fourth-quarter results were largely unsurprising. Full-year revenue came in as expected, an increase of 22%, although the EBIT margin of 5.1% was slightly lower than our estimate of 6% and fell on the low end of the firm's guidance. Similarly to Siemens Gamesa, Vestas cited execution challenges due to the coronavirus having a negative impact on margins, although Vestas continued to maintain superior margins to its peers. We raise our fair value estimate to DKK 820 from DKK 775 as we roll forward our model and fully integrate Vestas’ offshore business, after it acquired the remainder of the shares from its joint venture with Mitsubishi Heavy Industries in December 2020. Shares are richly valued, which has been driven by substantial capital inflows into ESG funds.