Chip stocks fall with Nvidia after data center rev disappointment
Investing.com - UBS has reiterated a Buy rating and DKK360.00 price target on Orsted A/S (CSE:ORSTED) despite new regulatory challenges facing the company’s U.S. offshore wind projects. According to InvestingPro data, the stock has declined over 41% in the past year, with shares currently trading at $11.17, suggesting potential value opportunity based on the company’s Fair Value analysis.
Orsted’s Revolution wind project, which is 704MW and 50% owned by the company, has received a stop order, creating uncertainty at a critical time as the company prepares for a rights issue partly intended to fund its inability to secure partners on U.S. projects. As a prominent player in the Independent Power & Renewable Electricity Producers industry, Orsted maintains strong liquidity with a current ratio of 1.18, though InvestingPro analysis indicates the company is quickly burning through cash.
The timing raises concerns about Orsted’s fully-owned Sunrise wind project (924MW), which UBS notes would have a "much greater impact" if it were to receive a similar regulatory order, potentially affecting the DKK55bn capex project valued at approximately DKK130 per share pre-money.
UBS acknowledges that a stop order issued after permits have been granted "could be viewed as expropriation," but warns that Orsted shares may price in additional risk related to the potential stranding of the Sunrise project.
The risk of regulatory delays for Sunrise is cited as one of the reasons behind Orsted’s planned rights issue, with UBS noting that any delay would push back turbine installation work on the project.
In other recent news, Orsted A/S has seen its stock rating upgraded by Morgan Stanley. The firm moved Orsted’s rating from Equalweight to Overweight. Additionally, Morgan Stanley raised its price target for Orsted to DKK360.00 from a previous target of DKK340.00. This upgrade reflects Morgan Stanley’s expectation of a turning point in the renewables cycle. The firm suggests that investors are now seeking opportunities within the European utilities sector, which has been performing well. These developments indicate a shift in investor sentiment towards Orsted in the context of the broader renewables market.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.