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Investing.com -- Fortum Oyj (HE:FORTUM) shares fell over 6% on Tuesday after the Finnish utility released its capital markets day update without announcing a data-center deal that had been widely expected.
Morgan Stanley said the absence of any agreement “will likely disappoint the market,” noting that Fortum shares had gained 26% since September amid anticipation of such news. The bank described the lack of an announcement as a “meaningful downside surprise.”
The Nordic power generator, raised its 2030 EBIT target to €1.26 billion, a €330 million increase from the past 12 months. The improvement includes €260 million from generation, €40 million from the consumer business and €30 million from other operations.
Morgan Stanley said the target is 5% above consensus at €1.2 billion and added that Fortum confirmed the uplift does not include capex or pricing impacts, which the analysts understood to relate to higher Nordic power price assumptions.
The brokerage said the increase is instead driven by efficiency measures and organic growth.
Morgan Stanley wrote that additional commentary during the day’s presentations “could drive the shares through the day.”
However, it emphasized that the initial release contained no update on data-center activity, the issue it identified as central to market expectations. In its catalyst summary, the bank again labeled the missing deal a “meaningful downside surprise.”
Fortum set €2 billion in capex for 2026-2030, above the bank’s €1.7 billion projection. The company also identified €2.5 billion in additional investment headroom.
It reiterated its BBB credit rating and raised its permitted net-debt-to-EBITDA ceiling to 2.5x from the previous 2-2.5x, compared with about 1x currently. The utility maintained its investment hurdle rate of a 150-400-basis-point spread over WACC.
The company kept its dividend payout ratio at 60-90%, a stance Morgan Stanley said “should be taken as reassuring.”
Fortum also increased its 2026 optimisation premium guidance to €8-10/MWh, up from €6-8/MWh, while keeping the long-term range at €6-8/MWh. The brokerage said the higher 2026 figure “could drive some modest EPS upgrades.”
In its operational outlook, Fortum targeted 2.5 GW of ready-to-deploy flexibility by the end of 2028, which Morgan Stanley said appears to consist mostly of batteries and customer-side offerings such as electric boilers.
The utility also raised its 10-year rolling hedge-book goal to 25% by end-2028 from 20% by end-2026.
Morgan Stanley maintained its “underweight” rating ahead of the event and noted that expectations for data-center news were elevated.