Ørsted A/S (ORSTED.CO) | Investment Case

1. Company Snapshot

1.a. Company Description

Ørsted A/S, together with its subsidiaries, develops, constructs, owns, and operates offshore and onshore wind farms, solar farms, energy storage facilities, renewable hydrogen and green fuels facilities, and bioenergy plants.It operates through Offshore, Onshore, and Bioenergy & Other segments.The Offshore segment develops, constructs, owns, and operates offshore wind farms in the United Kingdom, Germany, Denmark, the Netherlands, the United States, and Taiwan, as well as development of renewable hydrogen and green fuels in Europe, and e-methanol on the United States gulf coast.

The Onshore segment develops, constructs, owns, and operates onshore wind and solar farms in the United States and Europe, as well as integrated storage.The Bioenergy & Other segments engages in the generation of heat and power and delivery of ancillary services from CHP plants in Denmark; sells power and gas in the wholesale and B2B markets; and optimizes gas portfolio.The company was formerly known as DONG Energy A/S and changed its name to Ørsted A/S in November 2017.

Ørsted A/S was founded in 1972 and is headquartered in Fredericia, Denmark.

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1.b. Last Insights on ORSTED

Ørsted A/S faces significant challenges, including a recent stop-work order on its Revolution Wind project by the US government, citing national security concerns. The company's ill-timed push into the US market has led to financial struggles, with soaring inflation and logistical problems. To address these issues, Ørsted plans to sell new shares at a 67% discount in a $9.4 billion rights offering, its largest in over a decade. Additionally, a US federal judge's decision to allow Ørsted to resume work on the Revolution Wind project has provided some relief.

1.c. Company Highlights

Last Price	137.85
Change Percentage	-0.11%
Open	137.4
Previous Close	138
Market Cap ( Millions)	58717
Volume	1172838
Year High	365.5
Year Low	102.82
M A 50	122.97
M A 200	225.74

FCF Yield	-58.33%
Dividend Yield	0.00%
ROE	8.21%
Debt / Equity	103.19%
Net Debt / EBIDTA	354.55%
Price To Book	0.66
Price Earnings Ratio	8.8
Price To FCF	-1.71
Price To sales	0.91
EV / EBITDA	6.19

2. Offshore Wind Leader Reports Mixed Q3 2025 Results

The company's financial performance for Q3 2025 showed an EBITDA of DKK 3.1 billion, with the offshore business contributing DKK 2.2 billion. However, total impairments amounted to DKK 1.8 billion, primarily related to the offshore business, leading to a net profit of negative DKK 1.7 billion. Earnings per share (EPS) came in at DKK 4.07, significantly beating estimates of -DKK 2.53. The reported ROCE was 2%, while the adjusted ROCE was 10.2% when excluding impairments and cancellation fees.

Publication Date: Nov -06

                                    📋 Highlights
                                    Capital Structure Strengthened:
                                                Completed DKK 39 billion divestment of 50% in Hornsea 3 to Apollo, alongside a rights issue, boosting financial resilience for 6 offshore wind farms under construction.
Construction Progress Accelerates:
                                                8.1 GW offshore wind portfolio on track, with Borkum Riffgrund 3 foundations/turbines installed and Hornsea 3 unexploded ordnance removal completed.
Annual Cost Savings Targeted:
                                                Organizational adjustments aim to deliver DKK 2 billion annual savings from 2028, enhancing operational efficiency and flexibility.
EBITDA Guidance Confirmed:
                                                Delivered DKK 17 billion EBITDA in Q1-Q3 2024; full-year guidance of DKK 24-27 billion maintained despite below-average wind conditions.
Net Debt Rises to DKK 83 Billion:
                                                Driven by DKK 15 billion in renewable investments, but FFO/adjusted net debt ratio expected to exceed 30% post-Hornsea 3 proceeds and rights issue.

                                

Operational Highlights and Progress on Strategic Priorities

The company continued to make progress on its four strategic priorities, including strengthening its capital structure through the completion of a rights issue in October, delivering on its 8.1 gigawatt offshore wind construction portfolio, ensuring disciplined capital allocation, and improving competitiveness. The company installed all foundations and turbines at Borkum Riffgrund 3 in Germany and expects first power before the end of the year. It also announced an agreement with Apollo to divest a 50% ownership share in the Hornsea 3 project for approximately DKK 39 billion.

Valuation and Growth Prospects

With a current P/E Ratio of 7.29 and an EV/EBITDA ratio of 5.7, the company's valuation appears reasonable considering its growth prospects. Analysts estimate next year's revenue growth at 10.6%. The company's ROE is 8.21%, indicating a decent return on equity. The Net Debt / EBITDA ratio is 3.55, which is relatively high but expected to improve following the Hornsea 3 transaction.

Cash Flow and Investment Plans

The company's gross investment guidance remains unchanged at DKK 50-54 billion, with an expected investment level of around DKK 50 billion for the next two consecutive years. The operating cash flow guidance is DKK 50 billion for 2025-2027, with a conversion ratio between EBITDA and operating cash flow expected to be around 60%.

Project Updates and Risks

The company is progressing with its offshore wind projects, including Hornsea 3 and Revolution Wind. However, the stop-work order on Revolution Wind poses a risk, and the company is pursuing both a legal track and a dialogue track to resolve the issue. The onshore substation is still on the critical path, with energization expected early next year.

3. NewsRoom

Is Ørsted Finally a Value Opportunity After Its Recent Share Price Rebound?

Dec -04

Source:

Ørsted’s Borkum Riffgrund 3 wind farm delivers first power in Germany

Dec -04

Source:

Energy & Utilities Roundup: Market Talk

Dec -04

Source:

Energy & Utilities Roundup: Market Talk

Dec -03

Source:

Energy & Utilities Roundup: Market Talk

Dec -02

Source:

Ørsted-ESB JV selected for Tonn Nua offshore wind development

Nov -27

Source:

Dominion Energy Is a Utility Play With AI Upside. It’s a Buy.

Nov -26

Source:

Does Ørsted's (CPSE:ORSTED) Osonic Partnership Hint at a New Phase in Renewable Innovation?

Nov -15

Source:

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (7.70%)

6. Segments

Offshore

Expected Growth: 10.0%

The offshore wind industry is expected to continue growing rapidly, driven by increasing demand for renewable energy and declining technology costs. Ørsted's strong project pipeline and leadership position in the market are expected to drive growth.

Onshore

Expected Growth: 8.0%

The onshore wind and solar markets are expected to continue growing, driven by increasing demand for renewable energy and improving economics. Ørsted's expanding project pipeline and strategic partnerships are expected to drive growth.

Bioenergy & Other

Expected Growth: 5.0%

The bioenergy market is expected to grow steadily, driven by increasing demand for renewable energy and carbon reduction targets. Ørsted's existing bioenergy assets and potential for new projects are expected to drive growth.

Other Activities/Eliminations

Expected Growth: 3.5%

Ørsted A/S's miscellaneous activities and eliminations of intercompany transactions are expected to grow driven by increasing renewable energy demand, electrification of transportation, and strategic partnerships.

7. Detailed Products

Offshore Wind Farms

Ørsted A/S develops, constructs, and operates offshore wind farms that generate renewable energy from wind power.

Onshore Wind Farms

Ørsted A/S develops, constructs, and operates onshore wind farms that generate renewable energy from wind power.

Solar Farms

Ørsted A/S develops, constructs, and operates solar farms that generate renewable energy from sunlight.

Bioenergy

Ørsted A/S produces bioenergy from sustainable biomass sources, providing a renewable alternative to fossil fuels.

Renewable Energy Trading

Ørsted A/S trades renewable energy certificates, ensuring that renewable energy is delivered to customers and supporting the transition to a low-carbon economy.

Energy Storage

Ørsted A/S develops and operates energy storage solutions, enabling the efficient and reliable integration of renewable energy into the grid.

8. Ørsted A/S's Porter Forces

Forces Ranking

Threat Of Substitutes

Ørsted A/S operates in the renewable energy industry, which has a moderate threat of substitutes. While there are alternative sources of energy, such as fossil fuels, the increasing demand for renewable energy and government regulations supporting the industry reduce the threat of substitutes.

Bargaining Power Of Customers

Ørsted A/S has a diverse customer base, including utilities, industrial companies, and governments. The company's large scale of operations and diversified customer base reduce the bargaining power of customers.

Bargaining Power Of Suppliers

Ørsted A/S relies on a few large suppliers for its wind turbine components. While the company has some bargaining power due to its large scale of operations, the suppliers also have some bargaining power due to the specialized nature of the components.

Threat Of New Entrants

The renewable energy industry has high barriers to entry, including significant capital requirements and regulatory hurdles. This reduces the threat of new entrants and provides a competitive advantage to established players like Ørsted A/S.

Intensity Of Rivalry

The renewable energy industry is highly competitive, with several large players competing for market share. Ørsted A/S faces intense competition from companies like Vestas, Siemens Gamesa, and Enel Green Power, which increases the intensity of rivalry.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	53.71%
Debt Cost	4.58%
Equity Weight	46.29%
Equity Cost	7.18%
WACC	5.78%
Leverage	116.03%

11. Quality Control: Ørsted A/S passed 1 out of 9 key points

Strong Liquidity

Low Deb

Strong Interest Coverage

Healthy Cash Flow

Operating Inefficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

VERBUND

A-Score: 6.4/10

Value: 5.5

Growth: 9.0

Quality: 7.8

Yield: 6.2

Momentum: 1.5

Volatility: 8.3

1-Year Total Return ->

Ecoener

A-Score: 4.6/10

Value: 4.1

Growth: 5.2

Quality: 3.4

Yield: 1.2

Momentum: 7.0

Volatility: 6.7

1-Year Total Return ->

Enlight Renewable Energy

A-Score: 3.7/10

Value: 2.0

Growth: 3.9

Quality: 4.3

Yield: 0.0

Momentum: 10.0

Volatility: 1.7

1-Year Total Return ->

EDP Renováveis

A-Score: 3.1/10

Value: 6.3

Growth: 2.3

Quality: 2.7

Yield: 1.9

Momentum: 2.0

Volatility: 3.7

1-Year Total Return ->

Ørsted

A-Score: 2.9/10

Value: 9.0

Growth: 2.9

Quality: 4.0

Yield: 1.2

Momentum: 0.0

Volatility: 0.3

1-Year Total Return ->

OX2

A-Score: 2.9/10

Value: 4.6

Growth: 4.2

Quality: 2.8

Yield: 0.0

Momentum: 5.0

Volatility: 0.7

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

13.78%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

5.78%

Ørsted A/S - DK0060094928

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on ORSTED

1.c. Company Highlights

Lower Quality

Weak Momentum

More Volatile

Earnings Miss

Revenues Beats

Earnings Beats

Revenues Miss

Average Yield

Strong Momentum

Fairly Valued

Stable Momentum

Lower Growth

Cheaper

2. Offshore Wind Leader Reports Mixed Q3 2025 Results

Operational Highlights and Progress on Strategic Priorities

Valuation and Growth Prospects

Cash Flow and Investment Plans

Project Updates and Risks

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (7.70%)

6. Segments

Offshore

Expected Growth: 10.0%

Onshore

Expected Growth: 8.0%

Bioenergy & Other

Expected Growth: 5.0%

Other Activities/Eliminations

Expected Growth: 3.5%

7. Detailed Products

Offshore Wind Farms

Onshore Wind Farms

Solar Farms

Bioenergy

Renewable Energy Trading

Energy Storage

8. Ørsted A/S's Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Ørsted A/S passed 1 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

137.85$

Current Price

137.85$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA