Shares of Vestas Wind Systems plunged following news that Donald Trump had won the 2024 presidential election. Investors have dumped shares in the world’s largest wind turbine maker as Trump vows to cut renewable energy subsidies and favor the oil and gas industry. Other European renewable energy companies, including wind farm operator Orsted, also fell. However, analysts at several investment banks said investors were overreacting to concerns about the industry’s decline. VWDRY 1Y line “For Vestas, a victory for Donald Trump and a Republican sweep in Congress is the worst political outcome in the United States,” said Jacob Pedersen, head of equity analysis at Danish investment bank Sydbank. ) express. “But that doesn’t necessarily translate into a worst-case legislative scenario or a very negative earnings scenario that Vestas stock is pricing in right now.” Pederson said President Joe Biden’s signature package of dozens of provisions for clean energy companies Any changes to the Inflation Reduction Act, the signature policy of $100 million in subsidies, will not reduce Vestas’ revenue because the company has enough orders in the United States for the next two years. “Also, the fear of legislative changes may bring forward customer planning and delivery of new orders so that Vestas can build a pipeline into 2026 and 2027 before we know more about Donald Trump’s intentions to change the IRA. order pipeline,” Pedersen added in a Nov. 5 note to clients. “We maintain our buy recommendation on Vestas. And he’s not alone — all analysts covering the stock agree on a price target of over 50% upside. CEO Loading The company’s CEO appears to have taken note of the analysts’ comments Call. Vestas disclosed on November 6 that CEO Henrik Andersen bought 10,000 shares on the Nasdaq exchange in Copenhagen, worth about $150,000 in Vestas stock. U.S. trades under the ticker VWDRY. Deutsche Bank analysts John Kim and Gael de-Bray agreed that U.S. political sentiment was “not supportive” of Vestas’ share price, but said the market The overreaction may reflect too much of the worst-case scenario. Analysts said this could provide an opportunity for investors, as shares could rise if things turn out better than expected. “We see limited downside from current levels, but the stock may not perform in the near term due to uncertainty,” they added. In addition to political headwinds, Vestas Energy Systems has also had to contend with rising prices over the past few quarters. material and labor costs. That’s led to lower profit margins, putting more pressure on the stock, which has fallen more than 50% this year. However, analysts say costs have stabilized and the company’s profit margins are improving. After adjusting for this, Deutsche Bank lowered its target price on the stock to 150 Danish kroner ($21.56), which still implies a 40% upside from current levels.
