Share Price: DKK128.7
Target Price: DKK234
Vestas, based in Denmark, is the world's largest wind turbine manfuacturer.
Matrix believes the recent sell-off in Vestas shares is an over-reaction to predictions that the company will cut its revenue and order intake guidance. The broker has reviewed Vestas current order book and believes that the company is likely to meet its revenue guidance of EUR7 bn for this year. Although the year-to-date order volume may appear to be low, Matrix observes that the order intake is in line with seasonal trends – and H1 order intake is 35% higher than 2010. The broker points out that Vestas has had a vote of confidence from leading developers in the form of turbine orders.
Vestas shares rose by 27% after the Japanese tsunami, peaking at DKK228, but have subsequently fallen as low as DKK112 in May, despite strong order intake that month. Matrix sees the current price level as an attractive entry point.