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Investing.com - Shares in wind turbine group Nordex (ETR:NDXG) fell by 4% in European trading on Thursday, as analysts flagged a news report which said Germany could soon move to slow the expansion of its renewable energy ambitions.
Speaking to Recharge, German Chancellor Friedrich Merz hinted at a possible cooling in the sector’s growth.
"If we can reduce everything a bit, then at least on the timeline, the expansion could go a little slower and security of supply a little faster and more reliably," Merz told Recharge.
The news outlet flagged that this policy shift aligns with the potential conclusion of a forthcoming report on Germany’s energy transition, which was commissioned earlier this year and has yet to be published. Recharge added that the much-anticipated report is largely complete and will be evaluated by German authorities next week.
In a note to clients, analysts at Jefferies said a reduction in Germany’s 2030 onshore wind target "could dampen sentiment" around Nordex, which competes with peers like GE and Siemens Energy in the market for onshore wind turbines. Along with Turkey and Latvia, Germany was Nordex’s strongest market in the second quarter.
Still, the brokerage said Nordex’s valuation remains "undemanding" and their analysis is pointing to "limited downside risk" to the company’s earnings. They noted that the "rapid expansion wind turbines and photovoltaic systems is not only important for climate targets" in Germany, but any delays could also "affect security of supply" making expansion "crucial."
So far this year, shares of Hamburg-based Nordex have climbed by more than 73%. In its prior quarter, the group posted a roughly 64% jump in core income versus a year ago to 108.2 million euros, surpassing company-compiled expectations of 102 million euros. Its annual guidance was also confirmed, with CEO Jose Luis Blanco expressing confidence in the business over "the remainder of the year."