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Orsted A/S ORSTED

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Stock XCSE Rating as of
DKK 399.50 +10.00 (2.57%)
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Company Report

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European Utilities Edged Up in Q2 on Soaring Power Prices, High Interest Rates Still a Drag

Tancrede Fulop

Utilities have reversed part of their first quarter’s fall, thanks to a strong rebound in power prices. Moreover, the deep undervaluation of renewables developers has driven takeovers by big investment firms at very high multiples. Neoen’s main shareholders accepted an offer at 18 times the EBITDA. The sector is still significantly lagging the market in 2024 because of high interest rates. Should they fall, it would boost the sector.

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Price vs Fair Value

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ORSTED is trading at a 255% premium.
Price
DKK 389.50
Fair Value
DKK 923.00
Uncertainty
Medium
1-Star Price
DKK 257.00
5-Star Price
DKK 274.00
Economic Moat
Gck
Capital Allocation
Nbspyql

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 389.50
Day Range
DKK 390.00–402.90
52-Week Range
DKK 248.00–633.00
Bid/Ask
DKK 399.00 / DKK 399.40
Market Cap
DKK 167.88 Bil
Volume/Avg
617,681 / 560,812

Key Statistics

Price/Earnings (Normalized)
8.43
Price/Sales
3.03
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
8,900
Website
https://www.orsted.com

Competitors

Valuation

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Metric
ORSTED
IBE
RWE
Price/Earnings (Normalized)
 8.4312.7246.30
Price/Book Value
 2.751.400.76
Price/Sales
 3.031.640.97
Price/Cash Flow
 13.817.4611.89
Price/Earnings
ORSTED
IBE
RWE

Financial Strength

Metric
ORSTED
IBE
RWE
Quick Ratio
 1.020.600.56
Current Ratio
 1.370.771.56
Interest Coverage
 −3.354.983.75
Quick Ratio
ORSTED
IBE
RWE

Profitability

Metric
ORSTED
IBE
RWE
Return on Assets (Normalized)
 −2.42%4.79%1.36%
Return on Equity (Normalized)
 −10.60%14.40%4.64%
Return on Invested Capital (Normalized)
 −2.73%7.51%2.60%
Return on Assets
ORSTED
IBE
RWE
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Utilities - Renewable Industry Comparables

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1-Day Chart
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Morningstar Rating for Stocks
Capital Allocation
Economic Moat
Market Cap
Constellation Energy Corp
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—Frnn$28.8 Bil
 Orsted A/S ADR
DNNGY
—Zdj$23.7 Bil
 Orsted A/S
DOGEF
—Dyc$23.7 Bil
 China Longyuan Power Group Corp Ltd Class H
CLPXF
—Rycct$15.9 Bil
 China Longyuan Power Group Corp Ltd ADR
CLPXY
—Css$15.9 Bil
 Brookfield Renewable Partners LP
BEP
MyvvbmmslYgf$7.5 Bil
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LpsjzkxpfgCjh$5.2 Bil

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