New capital boosts Vestas – Nordea

Wind turbine group Vestas is better placed to defend its top spot in the global market armed with the proceeds of its recent share issue, said investment bank Nordea.

Nordea analysts reiterated their 'buy' rating on Vestas and boosted their target price for the company’s shares by DKr10 to DKr220 (they are trading at about DKr197 today), as they gave their verdict on a significant few days for the Danish group last week.

Vestas raised about €442m ($597m) in a capital raising, which it announced on the eve of its annual report and Q4 results presentation.

Nordea said: “Following its capital injection, Vestas should be better positioned to defend its market-leading position in the turbine industry.

“We believe the capital was necessary to keep up with competition against GE and Siemens, and to further distance Vestas from tier two players such as Gamesa, Nordex, Suzlon and Enercon.”

The analysts also noted that thanks to its stronger balance sheet, the wind group hopes to see increased confidence among customers over its warranty obligations.

The bottom end of Vestas' 2014 guidance – revenue of at least €6bn and Ebit margin at least 5% – “seems conservative” in the light of a pickup in the US market, and is likely to be increased as the year unfolds, Nordea added.

Vestas’ 2014 order intake – the “greatest threat” to a positive investment case – is expected by the bank to remain solid at 5.8GW.