Europe Wind Manufacturers: US orders continue to progress, adding upside risk to profit outlook

Research evidence excerpt

Europe Wind Manufacturers: US orders continue to progress, adding upside risk to profit outlook

Goldman Sachs Europe Wind Manufacturers

22x multiple to 2030E EBIT (on an ex-IRA growth basis) discounted back to 2026E. Our

M&A multiple is based on the second-quartile median average M&A multiple for the

Industrials sector in Western Europe over the last ten years. We apply the target multiple

to 2030E earnings to capture the growth trajectory of the company.

Key downside risks to our view and price target include a decline in global volumes in

onshore/offshore wind that would likely negatively impact order intake; lower US

installations; the absence of M&A in the wind sector that could make our M&A

component less meaningful; and a significant decline in commodity prices that would

likely make wind less profitable vs. thermal technologies.

Nordex: Buy, 12m PT of €53.2

Investment Thesis, Valuation & Risks

Nordex is benefiting from the same tailwinds we see driving the broader onshore wind

turbine industry. At the top line, improved pricing alongside order growth has supported

a recovery of margins. Combined, this creates a picture of higher profits and a stronger

balance sheet. We see this translating to higher returns of value over time. This could be

used for dividends, buybacks, reserves and for investment into the businesses. We

expect further improvement in margins and higher cash returns which, combined with

an uptick in onshore US and German orders into this year, sets the stage for the

company to achieve its medium-term outlook, and we expect the strong share

performance to continue.

We are Buy rated on Nordex with a 12-month price target of €53.2. Our price target is

based on a DCF valuation, for which we use a 7.9% post-tax WACC in the medium and

long term.