CTAs are almost max long in equities, have very limited room to buy: UBS
On Tuesday, Stifel maintained a positive outlook on Cadeler (NYSE:CDLR), reiterating a Buy rating and a $37.00 price target. The endorsement follows Cadeler's announcement of two firm contracts for its O-Class and P-Class vessels, which are scheduled to begin work in the Polish Baltic Sea in 2027. These contracts are for the installation of 100 turbine generators as part of the Baltyk 2 and Baltyk 3 wind projects.
The contracts, jointly owned by Equinor and Polenergia, have an estimated value ranging from €120 million to €144 million. This substantial deal raises Cadeler's order backlog to over €2 billion. The company's operational efficiency is highlighted by the expectation that the installation of the turbines will take less than 200 days, despite a typical installation time of three days per turbine.
Cadeler's recent contract win is a significant step in solidifying its presence in the Polish market. The successful negotiation of these contracts also reduces the availability of Cadeler's vessels for other potential projects. This development indicates the company's growing footprint in the offshore wind energy sector and its ability to secure valuable contracts.
The two vessels involved in the Baltyk projects will play a crucial role in the installation process, with Cadeler estimating earnings of €1.2 million to €1.4 million per turbine. The commencement of these installations is a key milestone for the company, with the potential for completing the project in under 200 days, which would not only enhance returns but also free up the vessels for additional work in the region.
The announcement of these firm contracts marks an official agreement for Cadeler, following prior disclosures about the vessel arrangements for the Baltyk 2 and Baltyk 3 projects. With the installation slated for 2027, the company is poised to efficiently execute the project, thereby optimizing its asset utilization and potentially securing more opportunities in the burgeoning offshore wind energy market.
In other recent news, Cadeler A/S, an offshore wind installation and services firm, has had several significant developments. The company announced the early completion of its share buy-back program, initially set to end on July 12, 2024. Cadeler repurchased a total of 214,791 shares at an average price of NOK 68.28 each, amounting to approximately EUR 1.29 million.
Additionally, Cadeler has reported a minor increase in its share capital due to the exercise of options under their employee equity incentive program, issuing 27,715 new shares. Cadeler is also contemplating a strategic re-domiciliation of its parent company to the UK following its business combination with Eneti Inc. The move aims to align with the UK's corporate governance standards and tax environment, potentially broadening its international investor base.
Stifel, a financial services company, has maintained a Buy rating for Cadeler following a new contract secured by the company with higher rates than previous agreements. This new contract, involving the installation of 72 turbines, is expected to significantly boost the company's revenue. These recent developments underscore Cadeler's commitment to fulfilling its obligations to employees and its strategic growth initiatives.
InvestingPro Insights
Cadeler's recent contract wins align well with several InvestingPro Tips and metrics, providing additional context to the company's financial outlook. According to InvestingPro Tips, analysts anticipate sales growth for Cadeler in the current year, which is consistent with the significant boost to its order backlog, now exceeding €2 billion. This positive outlook is further supported by the expectation that the company will be profitable this year.
The company's financial health appears solid, with InvestingPro Data showing that Cadeler operates with a moderate level of debt and its liquid assets exceed short-term obligations. This financial stability positions the company well to execute on large-scale projects like the Baltyk 2 and Baltyk 3 wind installations.
Investors should note that Cadeler's stock has shown strong performance, with a 61.03% price total return over the past year and is trading near its 52-week high. The company's market cap stands at $2.46 billion, reflecting investor confidence in its growth prospects.
For readers interested in a more comprehensive analysis, InvestingPro offers 13 additional tips for Cadeler, providing a deeper understanding of the company's financial position and market performance.
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