Vestas’ Struggles Continue in Q3; Lowers Guidance for the Second Time This Year

No-moat Vestas’ struggles this year continued in the third quarter, reiterating why our preferred way to play the transition to wind energy is through utilities and producers of wind energy. Vestas reported an operating loss of EUR 127 million in the third quarter, its third consecutive quarterly operating loss, driven by cost inflation on the group’s existing order backlog and project delays. One positive this quarter was the 32% increase in the average selling price of its wind turbines, which will help combat inflationary pressures and combined with lower commodity prices, will support a return to profitability. Management lowered its full-year guidance for the second time this year; however, it will not impact our DKK 176 fair value estimate. We view shares as fairly valued