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Orsted A/S (DNNGY)
OTHER OTC:DNNGY

Orsted (DNNGY) AI Stock Analysis

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Orsted

(OTC:DNNGY)

Rating:54Neutral
Price Target:
$14.00
▼(-2.64%Downside)
Orsted's overall stock score reflects a challenging financial and valuation environment, slightly offset by positive highlights from the earnings call. The company's high leverage, negative free cash flow, and overvaluation are primary concerns, while EBITDA growth and strategic divestments provide some optimism.

Orsted (DNNGY) vs. SPDR S&P 500 ETF (SPY)

Orsted Business Overview & Revenue Model

Company DescriptionØrsted A/S, together with its subsidiaries, develops, constructs, owns, and operates offshore and onshore wind farms, solar farms, energy storage facilities, and bioenergy plants. It operates through Offshore, Onshore, and Markets & Bioenergy segments. The Offshore segment develops, constructs, owns, and operates offshore wind farms in the United Kingdom, Germany, Denmark, the Netherlands, the United States, Taiwan, Japan, and South Korea. The Onshore segment develops, owns, and operates onshore wind and solar farms in the United States. The Markets & Bioenergy segment engages in the generation of heat and power from combined heat and power plants in Denmark; sells power and gas in the wholesale and B2B markets; and optimizes and hedges energy portfolio. The company was formerly known as DONG Energy A/S and changed its name to Ørsted A/S in November 2017. Ørsted A/S was founded in 1972 and is headquartered in Fredericia, Denmark.
How the Company Makes MoneyØrsted makes money primarily through the sale of electricity generated from its renewable energy assets, including offshore and onshore wind farms, solar power installations, and energy storage solutions. The company enters into long-term power purchase agreements (PPAs) with utilities, governments, and corporate clients, providing a stable and recurring revenue stream. Additionally, Ørsted engages in trading activities related to the energy market, leveraging its expertise to optimize the dispatch of power and manage energy price risks. Significant partnerships with governments and other enterprises also contribute to its earnings, facilitating the development and expansion of its renewable energy projects globally.

Orsted Earnings Call Summary

Earnings Call Date:May 07, 2025
(Q1-2025)
|
% Change Since: 5.97%|
Next Earnings Date:Aug 13, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted strong financial performance with increased EBITDA and successful divestments. However, significant challenges were noted, including the discontinuation of the Hornsea 4 project and financial implications from U.S. tariffs and project cancellations.
Q1-2025 Updates
Positive Updates
Solid EBITDA Growth
Reported group EBITDA increased by 18% compared to last year, amounting to DKK8.9 billion.
Successful Divestments
Completed divestments of solar farms in the U.S. and part of the West of Duddon Sands offshore wind farm in the U.K., generating proceeds of around DKK7 billion.
Operational Capacity Milestone
Successfully commissioned the Gode Wind 3 project, increasing installed offshore wind capacity to over 10 gigawatts.
Increased Renewable Energy Share
Renewable energy generation reached 99% in Q1 2025, driven by the closing of a large coal-fueled CHP plant.
Improved Safety Record
Total recordable injury rate reduced from 2.9% last year to 1.9%.
Negative Updates
Hornsea 4 Project Discontinuation
Decision to discontinue the development of the 2.4 gigawatt Hornsea 4 project due to cost increases and execution risks.
U.S. Tariff Impacts
New tariffs on steel and aluminum imports to the U.S. led to an additional impairment of DKK1.2 billion.
Fatalities at Plum Creek Wind Farm
Two tragic fatalities among contractor employees, overshadowing safety improvements.
Potential Financial Impact from Project Cancellation
Hornsea 4 discontinuation could lead to a negative impact on EBITDA of approximately DKK3 billion to DKK3.5 billion in Q2 2025.
Company Guidance
During the Ørsted Q1 2025 earnings call, CEO Rasmus Errboe outlined the company's strategic priorities and provided a detailed update on their offshore wind projects. The company has set a target to deliver more than 8 gigawatts in their offshore construction portfolio and reported a solid operational performance with an 18% increase in group EBITDA compared to last year, totaling DKK8.9 billion. Ørsted also highlighted their commitment to a disciplined capital allocation strategy, focusing on value over volume, which led to the discontinuation of the 2.4 gigawatt Hornsea 4 project in its current form due to increased costs and execution risks. The divestment of assets, such as parts of the West of Duddon Sands offshore wind farm, brought in total proceeds of around DKK7 billion, supporting a strengthened capital structure. Despite short-term challenges in the offshore wind sector, Ørsted reaffirmed its full-year EBITDA guidance of DKK25 billion to DKK28 billion and a gross investment forecast of DKK50 billion to DKK54 billion. The company also reported a decrease in their total recordable injury rate, reflecting a focus on safety, and emphasized the importance of monitoring evolving regulatory frameworks to ensure continued competitiveness.

Orsted Financial Statement Overview

Summary
Orsted's financial performance is mixed with a declining revenue trend and challenges in profitability. The balance sheet shows moderate stability with high leverage, and cash flow issues are evident due to negative free cash flow trends.
Income Statement
55
Neutral
Orsted's income statement shows a declining trend in revenue with a sharp decrease from 2022 to 2023 and a slight recovery in TTM. The gross profit margin is around 31% in TTM, indicating stability in cost management. However, the net profit margin is relatively low at 2.97% in TTM due to high operating expenses. The company has struggled with profitability over recent periods, especially with a negative net income in 2023. The TTM figures show a turnaround with positive net income, yet the overall growth trajectory remains weak.
Balance Sheet
60
Neutral
The balance sheet reflects a moderate level of financial stability. Orsted's debt-to-equity ratio is approximately 1.06 in TTM, suggesting a balanced approach to leveraging. The equity ratio is 30.15%, indicating a significant proportion of assets financed by equity. Return on equity (ROE) is quite low at 2.11% in TTM, pointing to limited profitability relative to shareholder's equity. Despite high total liabilities, the company's liquidity position is supported by substantial cash reserves.
Cash Flow
48
Neutral
Orsted's cash flow statement reveals challenges in maintaining positive free cash flow, with significant capital expenditures leading to negative free cash flow trends. The operating cash flow to net income ratio is 8.41 in TTM, indicating strong cash generation relative to net income. However, the free cash flow to net income ratio is -17.91, highlighting the impact of high capital investments. The free cash flow growth rate is negative, pointing to ongoing cash flow challenges.
Breakdown
TTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
61.68B58.83B69.08B126.09B69.14B37.10B
Gross Profit
19.10B22.87B22.45B28.93B16.03B11.32B
EBIT
5.46B6.17B-17.85B13.37B8.04B9.01B
EBITDA
21.47B16.84B-7.70B27.34B23.84B27.49B
Net Income Common Stockholders
1.83B-206.00M-20.51B15.13B10.96B15.60B
Balance SheetCash, Cash Equivalents and Short-Term Investments
25.31B32.94B39.18B38.13B14.83B29.87B
Total Assets
182.78B298.79B281.14B314.14B270.38B196.72B
Total Debt
37.06B96.62B88.05B71.55B58.53B41.82B
Net Debt
33.32B73.81B78.38B57.84B49.90B36.38B
Total Liabilities
96.94B205.30B203.34B218.61B185.25B99.39B
Stockholders Equity
82.43B83.09B75.89B91.54B82.06B94.61B
Cash FlowFree Cash Flow
-32.77B-24.30B-9.67B-21.08B-22.42B-10.49B
Operating Cash Flow
15.38B18.36B28.53B11.92B12.15B16.47B
Investing Cash Flow
-23.41B-21.76B-34.73B-17.91B-12.59B-16.56B
Financing Cash Flow
878.00M15.84B265.00M13.79B3.39B-2.13B

Orsted Technical Analysis

Technical Analysis Sentiment
Positive
Last Price14.38
Price Trends
50DMA
13.53
Positive
100DMA
13.92
Positive
200DMA
16.41
Negative
Market Momentum
MACD
0.10
Negative
RSI
60.20
Neutral
STOCH
92.76
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DNNGY, the sentiment is Positive. The current price of 14.38 is above the 20-day moving average (MA) of 13.32, above the 50-day MA of 13.53, and below the 200-day MA of 16.41, indicating a neutral trend. The MACD of 0.10 indicates Negative momentum. The RSI at 60.20 is Neutral, neither overbought nor oversold. The STOCH value of 92.76 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for DNNGY.

Orsted Peers Comparison

Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
72
Outperform
$6.12B38.224.70%5.73%-1.34%21.62%
68
Neutral
$6.12B35.974.70%5.86%-1.34%21.62%
RNRNW
65
Neutral
$2.54B101.162.00%-1.77%-41.65%
64
Neutral
$8.54B10.404.24%4.63%4.14%-13.05%
60
Neutral
$5.80B32.67-4.65%4.62%1.01%-110.78%
54
Neutral
$17.86B103.991.91%5.43%
SMSMR
42
Neutral
$9.83B-32.34%62.41%-85.81%
* Utilities Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
DNNGY
Orsted
14.38
-5.29
-26.89%
CWEN
Clearway Energy
30.99
5.52
21.67%
CWEN.A
Clearway Energy
29.16
6.01
25.96%
BEPC
Brookfield Renewable
31.92
2.67
9.13%
SMR
NuScale Power
41.60
33.15
392.31%
RNW
ReNew Energy Global
6.80
0.50
7.94%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.