Vestas Wind Systems : Between A Rock And A Hard Place

2025-06-02 13:31:24 ET

Summary

• Vestas faces severe headwinds from US political hostility to renewables and fierce competition from dominant Chinese wind companies.
• Despite a strong global backlog and service contracts, Vestas' US order intake collapsed after President Trump's election, while European and emerging markets show promise.
• The global wind industry is rapidly expanding, but China now leads in both capacity and manufacturing, threatening Western wind firms' market share.
• As a contrarian investor, I see Vestas as a high-risk, high-reward play on Western renewables, with upside if global momentum offsets US setbacks.

It is a very hard time to be the Western world’s leading wind turbine manufacturer. Vestas Wind Systems (OTCPK: VWDRY ) is a superb manufacturer with 35,000 employees and more than 190 GW of turbines installed in 88 countries. The business has a strong combination of turbine sales (Q1 2025 order backlog of Euro 36.9 billion) and more than 157 GW of service contracts. Vestas is unloved with its share price down 44.1%% year on year. However most of that decline happened in the leadup to Donald Trump’s success in winning the Presidency (again) in November 2024. In the past six months the Vestas share price has literally been becalmed (up 2.3%)....

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