2024-04-26 13:37:10 ET
Summary
- Vestas Wind Systems experienced a rebound in FY23 with improved operating margins and profitability due to a surge in wind systems demand and higher wind turbine prices.
- Management forecasts all-time high revenue and an EBIT margin exceeding FY23. However, the company faces risks such as high interest rates and increasing competition from Chinese companies.
- Vestas operates in a rapidly growing wind power market, with strong performance expected in Europe and the US. The Service business segment is the most attractive in terms of growth and margins.
- DCF analysis reveals stock overvaluation.
Vestas Wind Systems A/S ( OTCPK:VWDRY ) is a Danish company, among the major manufacturers of wind turbines and wind power plants worldwide, with a 10% market share in FY23. After experiencing a slowdown in FY21 and a downturn in FY22, FY23 witnessed an improvement in operating margins and profitability, a trend expected to continue in FY24. The main reason behind this rebound was the significant surge in wind systems demand, with 117 GW of new installations in 2023, up 50% YoY. At the same time, increased demand has led to higher prices, allowing Vestas to regain profitability, and setting the stage for a margins' expansion phase. REPowerEU and the Inflation Reduction Act , represent additional growth catalysts in the near future....
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Vestas: Promising Outlook Already Priced In