Wartsila Oyj Abp: More capacity, more problems. Stay Underweight.

Research evidence excerpt

M

Idea

August 5, 2026 04:00 AM GMT

Wartsila Oyj Abp | Europe

Morgan Stanley & Co. International plc+

Max R Yates

Equity Analyst

More capacity, more problems.

Stay Underweight.

We stay UW on Wartsila. Engine competitor CAT plans to add

more capacity, now in medium speed (1.5GW). This would create

a new medium speed direct competitor that is 38% the size of

Wartsila (based on MSe 2029 WRT deliveries). We continue to

see supply/demand risks in BTM data center markets.

Key Takeaways

What happened: CAT announced it will restart 1.5GW of its medium speed engine

production (10MW engines), with deliveries starting in 4Q26.

We would expect this capacity to largely target BTM data center primary power,

with CAT already having received some orders to fill up new capacity

Overnight, this 1.5GW medium speed expansion would create new capacity that is

38% the size of our forecast for Wartsila's 2029 Energy deliveries.

We see risk of market share losses for Wartsila in 2027-28 on better competitor

lead-times. Then risk of overcapacity in BTM power solutions softens pricing.

In DC-exposed names, we prefer Schneider (OW) and ENR (OW). We stay UW

Wartsila. Risk of further de-rating from 12.6x 2028 EV/EBITA (ENR on 12.1x).

For detail on our Underweight rating on Wartsila, see these reports: (1) Gas

turbines / Engines - If you build it, they will come, (2) Wartsila: Competition

continues to rise in the DC primary power Engine space. Stay UW. (3) Wartsila: A

thematic growth valuation, without the consensus upgrades (May-26), (4) Wartsila:

Not all Energy is created Equal. Downgrade to Underweight. (March-26).

Morgan Stanley & Co. LLC

Angel Castillo

Equity Analyst

Morgan Stanley & Co. International plc+

Sara Chemello

Research Associate

Wartsila Oyj Abp (WRT1V.HE, WRT1V FH)

Capital Goods | Finland

Stock Rating

Industry View

Price target

Shr price, close (Aug 4, 2026)

52-Week Range

Mkt cap, curr (mn)

Net debt (12/26e) (mn)*

EV (12/26e) (mn)*

Underweight

In-Line

€27.50

€29.91

€40.75-23.71

€17,669

€(2,165)

€15,586

* = GAAP or approximated based on GAAP

Fiscal Year Ending

12/25 12/26e 12/27e 12/28e

Sales / Revenue

(€mn)**

EBITA (€mn)**

EPS (€)**

Prior EPS (€)**

P/E††**

EV/revenue*

…