Key Morningstar Metrics for Vestas Wind Systems
- Fair Value Estimate: DKK 135
- Morningstar Rating: ★★★★
- Morningstar Economic Moat Rating: None
- Morningstar Uncertainty Rating: High
Vestas Earnings Target is Ambitious
We are transferring coverage of Vestas VWS, one of the leading companies in the manufacturing, sale, and servicing of wind turbines.
The bottom line: We cut Vestas’ fair value estimate by 17% to DKK 135. We maintain our no-moat, Standard capital allocation, and High Morningstar Uncertainty ratings. At current levels, shares are attractive.
- In the last 12 months, Vestas’ shares dropped by 40% amid negative sentiment surrounding the wind industry, macroeconomic uncertainty, and the services segment underperformance.
- While Vestas benefits from some customer stickiness in its Services business, the lack of technical superiority and meaningful product differentiation leaves it exposed to intense price competition, supporting our no-moat rating.
Coming up: We expect the company to deliver 14 GW of wind turbines in 2025, with revenue reaching the midpoint of its guidance at EUR 19 billion.
- We see a modest margin uplift from 4.3% to 4.6% in 2025. This remains at the lower end of Vestas’ guided range of 4%-7%, reflecting risks from early-stage offshore production challenges and higher unit costs that may limit the company’s ability to reach its targets.
Long view: Vestas targets a 10% EBIT margin in the long term, which we view as overly ambitious given that the company remains exposed to intense pricing pressure, cost inflation, and potential competition from expanding Chinese OEMs.
