The
Danish
wind
turbine
maker
surprised
the
market
in
November
by
reporting
higher-than-expected
revenue
and
turning
from
loss
to
profit
in
the
third
quarter,
sending
the
shares
8%
higher
on
the
day.
After
also
announcing
several
large
orders
in
the
fourth
quarter
the
expectations
are
high
for
the
full
year
earnings
report
this
week.
“I’m
expecting
..
a
blockbuster
quarter
for
Vestas,”
Morningstar’s
equity
analyst
Matthew
Donen
states,
referring
to
the
announcement
of
several
large
orders
during
the
fourth
quarter.
This
included
a
1.1
GW
order,
its
largest
order
ever
received
in
the
United
States.
“Consensus
is
guiding
for
7.6GW
of
orders
during
the
quarter
compared
with
4.5
GW
during
the
previous
quarter”,
Donen
adds.
While
offshore
wind
developers
have
struggled
with
rising
interest
costs
and
supply
chain
disruption,
Vestas
has
benefited
from
the
delivery
of
higher-priced
turbines.
This
is
expected
to
continue
in
the
fourth
quarter.
“Importantly,
profitability
is
likely
to
trend
higher
and
remain
in
positive
territory
due
to
higher
turbine
selling
prices”,
Donen
says.
Are
Vestas
Shares
Fairly
Valued?
Morningstar’s
analyst
maintained
Vestas’
fair
value
estimate
of
197
Danish
kroner
following
the
group’s
strong
third-quarter
results.
The
analyst
forecasts
a
revenue
growth
of
6%
in
2023
to
€15.4
billion
(£13.16
billion),
driven
by
double-digit
pricing
growth
for
onshore
turbines
and
a
10%
increase
in
service
revenue.
However,
Donen
anticipates
that
profitability
will
remain
under
pressure
because
of
growing
competition,
despite
higher
selling
prices
and
easing
commodity
price
inflation.
With
Vestas
shares
trading
around
192
Danish
kroner
Matthew
Donen
believes
the
shares
are
fairly
valued,
in
comparison
to
the
fair
value
estimate
of
197
Danish
kroner.
Key
Morningstar
Metrics
for
Vestas
Stock
•
Fair
Value
Estimate:
197
DKK;
•
Current
Price:
191.84
DKK;
•
Morningstar
Rating:
★★★;
•
Morningstar
Economic
Moat
Rating:
None;
•
Morningstar
Uncertainty
Rating:
High.
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