Berenberg has upgraded its rating on Vestas Wind Systems to Buy from Hold, citing improving operational efficiency and an expected rebound in offshore wind margins.
The bank raised its price target to DKK 240 from DKK 196, reflecting confidence in the company’s ability to expand profitability. Vestas reported a second-quarter 2026 EBIT margin of 9.4%, exceeding expectations and supporting a revised full-year guidance range of 7% to 9%, up from 6% to 8% previously.
Berenberg projects corporate EBIT margins will reach 10.2% in 2027 and 11.2% in 2028, driven by volume growth in the offshore division and manufacturing efficiency gains. The bank also highlighted Vestas’s strong cash generation, with free cash flow before working capital totaling over €300 million in the first half of 2026.
Vestas maintains a net cash balance sheet, and Berenberg anticipates a €1 billion share buyback program in 2027. The company’s market valuation stands at approximately $33 billion, though gross margins remain weak at 14.75%, according to InvestingPro data.
The upgrade follows improved sentiment in the renewable energy sector, with Vestas positioned to benefit from increased offshore wind deployment amid policy support for clean energy transition.
