'Setting sail with favourable winds': DB starts OX2 with 'buy'
23/11/2023 11:42
** Deutsche Bank initiates OX2 OX2SE.ST with "buy", seeing
tailwinds for the Swedish wind and solar energy company from
strong valuations for onshore wind sales
** It expects OX2's net cash to triple by 2027 to SEK 11
billion ($1.05 billion), despite massive spending on project
acquisitions
** Broker expects OX2, which develops onshore energy storage
and offshore wind projects, to reach its sales targets and sees
15% upside to consensus earnings in 2025
** The company has broadly doubled its development portfolio
from 17.4GW in 2021 to 34GW nine months into 2023, the broker
notes
** It points to "healthy valuations" for recent onshore wind
sales, and sees 20-25% value creation in key markets (Sweden,
Finland, Poland) for new onshore projects
** Capital gains for peers on European farmdowns are at
record levels despite the higher rates environment, providing a
positive read-across, DB says
** The broker sees recent quality control issues at Siemens
Gamesa as a "manageable risk" for OX2, even though some delays
have occurred as a result
** It sets the target price at SEK 60, against Wednesday's
closing price of SEK 48
($1 = 10.4988 Swedish crowns)
(Reporting by Elsa Ohlen)
((elsa.ohlen@thomsonreuters.com))