Equinor ASA (EQNR) has acquired a 9.8% stake in Denmark-based wind energy developer Ørsted A/S (GB:0RHE) to strengthen its green portfolio. This deal positions Equinor as Ørsted’s second-largest shareholder, behind the Danish State, which maintains a controlling interest in Ørsted. Following the news, Equinor shares lost 3% yesterday. On the other hand, Ørsted shares gained 6% on the Copenhagen Stock Exchange.
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Equinor is a state-owned Norwegian energy company involved in oil, gas, wind, and solar projects in over 30 countries. Meanwhile, Ørsted is a renewable energy company that specializes in onshore and offshore wind farms, solar energy, and other clean energy solutions.
Equinor Acquires Ørsted Stake Amid Renewables Expansion
Equinor stated that its stake acquisition in Ørsted aligns with its strategy of value-driven growth in renewables. The company plans to invest over 50% in renewable and low-carbon projects by 2050, with about 20% allocated to these areas in 2023. This deal will support Equinor’s energy transition strategy, which aims to provide energy with progressively lower emissions by increasing renewable energy capacity.
Ørsted currently has 10.4 gigawatts of renewable generation capacity and aims to reach 38 gigawatts by 2030. Meanwhile, Equinor targets 12 to 16 GW of installed renewable energy capacity by 2030, up from 0.9 GW in 2023.
Equinor’s stake in Ørsted is currently valued at approximately $2.5 billion based on Ørsted’s closing price of kr 418 per share on Friday. Even though the offshore wind industry is encountering various challenges, Equinor remains optimistic about the long-term prospects for the sector.
Is Equinor a Good Stock to Buy?
In terms of share price appreciation, analysts are not bullish on Equinor stock. According to TipRanks’ analyst rating consensus, EQNR stock has received a Moderate Sell rating based on two Holds and one Sell recommendation. The Equinor share price forecast is $25.80, which is 2% lower than the current share price.
