Fortum OYJ (FOJCY) AI Stock Analysis

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Fortum OYJ

(OTC:FOJCY)

72Outperform

Fortum OYJ's stock is moderately attractive, with strengths in technical momentum and a solid earnings call outlook. The company's financial performance shows resilience but requires attention to revenue stability and cash flow consistency. Valuation is reasonable, and the dividend yield is appealing.

Fortum OYJ (FOJCY) vs. S&P 500 (SPY)

Market Cap

$12.71B

Dividend Yield3.15%

Average Volume (3M)14.89K

Price to Earnings (P/E)9.8

Beta (1Y)0.54

Revenue Growth-16.97%

EPS GrowthN/A

CountryUS

Employees4,369

SectorUtilities

Sector Strength88

IndustryRenewable Utilities

Share Statistics

EPS (TTM)0.28

Shares Outstanding4,486,322,300

10 Day Avg. Volume7,463

30 Day Avg. Volume14,887

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)1.47

Price to Cash Flow (P/CF)N/A

P/FCF Ratio0.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price TargetN/A

Price Target UpsideN/A

Rating ConsensusHold

Number of Analyst Covering1

Fortum OYJ Business Overview & Revenue Model

Company DescriptionFortum OYJ is a leading clean-energy company based in Finland, operating primarily in the Nordic and Baltic regions, Poland, and Russia. The company focuses on providing sustainable energy solutions, including the generation and distribution of electricity and heat. With a strong emphasis on decarbonization, Fortum operates a diverse portfolio of power plants, including hydroelectric, nuclear, and solar facilities, and provides energy-related services to a broad range of customers.

How the Company Makes MoneyFortum OYJ generates revenue through multiple streams, primarily from the sale of electricity and heat. The company operates efficient power plants and sells the generated electricity to wholesale markets, as well as directly to end-users. Fortum's heat business involves the production and distribution of district heating, which is particularly prevalent in the Nordic countries. Additionally, Fortum offers various energy-related services, including energy efficiency consulting and asset management. The company's strategic partnerships and investments in renewable energy projects further bolster its revenue-generating capabilities. Fortum's presence in both regulated and deregulated markets allows for diversified income sources, contributing to its financial stability.

Fortum OYJ Financial Statement Overview

Summary

Fortum OYJ shows a mixed financial performance with improved profitability and a strong balance sheet, yet faces challenges such as revenue volatility and inconsistent cash flow. Continued efforts to stabilize revenue and improve cash flow consistency are essential.

Income Statement

Positive

Fortum OYJ has shown volatile revenue trends with a significant drop from 2021 to 2022 but a smaller decline in 2023. The gross profit margin has been relatively stable around 43% to 45%. Net profit margin showed improvement in 2024, recovering from a substantial loss in 2023. However, the revenue growth rate remains negative, indicating challenges in maintaining sales momentum.

Balance Sheet

Positive

The company maintains a strong equity base with an increasing stockholders' equity over recent years. The debt-to-equity ratio has improved, suggesting better leverage management. The equity ratio indicates a solid financial structure with over 50% equity in total assets, reflecting stability in the company's financial health.

Cash Flow

Neutral

Operating cash flow has demonstrated inconsistency, with substantial fluctuations over the past years. The free cash flow has been positive in 2024, following negative figures in previous years. This recovery indicates potential improvement in cash generation. However, the overall cash flow position remains volatile, posing risks to financial stability.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
5.80B	6.71B	8.80B	112.40B	49.02B
	Gross Profit
2.50B	2.90B	3.33B	7.23B	4.72B
	EBIT
1.32B	1.66B	1.87B	6.22B	2.84B
	EBITDA
2.04B	2.21B	2.46B	4.82B	2.80B
	Net Income Common Stockholders
1.16B	-2.07B	1.01B	-114.00M	1.82B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
4.13B	4.18B	3.92B	7.59B	2.31B
	Total Assets
17.31B	18.74B	23.64B	149.66B	57.81B
	Total Debt
4.83B	5.91B	7.79B	17.22B	10.66B
	Net Debt
783.00M	1.73B	3.87B	9.63B	8.36B
	Total Liabilities
8.15B	10.24B	15.90B	136.00B	42.23B
	Stockholders Equity
9.07B	8.44B	7.67B	12.13B	12.95B
Cash Flow		Free Cash Flow
909.00M	1.24B	-9.30B	3.79B	1.45B
	Operating Cash Flow
1.39B	1.82B	-8.77B	4.97B	2.56B
	Investing Cash Flow
604.00M	1.10B	-985.00M	-5.73B	-2.14B
	Financing Cash Flow
-2.04B	-2.61B	6.07B	6.01B	505.00M

Fortum OYJ Technical Analysis

Technical Analysis Sentiment

Negative

Last Price2.92

Price Trends

50DMA

3.00

Negative

100DMA

2.87

Positive

200DMA

2.90

Positive

Market Momentum

MACD

0.06

Positive

RSI

54.97

Neutral

STOCH

13.23

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FOJCY, the sentiment is Negative. The current price of 2.92 is below the 20-day moving average (MA) of 3.05, below the 50-day MA of 3.00, and above the 200-day MA of 2.90, indicating a neutral trend. The MACD of 0.06 indicates Positive momentum. The RSI at 54.97 is Neutral, neither overbought nor oversold. The STOCH value of 13.23 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for FOJCY.

Fortum OYJ Peers Comparison

Overall Rating

UnderperformOutperform

Sector (65)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CWEN.A	74 Outperform	$5.61B	35.17	4.23%	6.41%	1.15%	10.99%
CWEN	73 Outperform	$5.61B	37.61	4.23%	6.11%	1.15%	10.99%
FOJCY	72 Outperform	$12.71B	9.85	13.43%	3.15%	-16.97%	―
BEPC	70 Outperform	$9.03B	30.80	6.15%	5.40%	-8.26%	―
Sector *	65 Neutral	$11.78B	15.57	6.20%	4.58%	5.53%	-8.93%
RNW	62 Neutral	$2.15B	85.55	2.00%	―	-1.77%	-41.65%
CEG	57 Neutral	$67.50B	18.10	31.12%	0.71%	6.89%	137.32%

* Utilities Sector Average

Performance Comparison

FOJCY

Fortum OYJ

2.92

0.45

18.22%

CWEN

Clearway Energy

28.03

6.52

30.31%

CWEN.A

Clearway Energy

26.16

6.20

31.06%

BEPC

Brookfield Renewable

26.38

5.06

23.73%

RNW

ReNew Energy Global

5.94

0.33

5.88%

CEG

Constellation Energy Corporation

208.25

17.88

9.39%

Fortum OYJ Earnings Call Summary

Earnings Call Date: Feb 11, 2025 | % Change Since: 3.55% | Next Earnings Date: Apr 29, 2025

Earnings Call Sentiment Positive

The earnings call highlighted Fortum's strong financial stability, successful divestments, and progress in decarbonization efforts, despite challenges from lower power prices and nuclear availability issues. The financial performance and strategic execution present a positive outlook, but operational challenges indicate areas for improvement.

Highlights

Strong Financial Performance and Strategy Execution

Despite challenging conditions, Fortum achieved a good power price level in 2024 through successful hedging and physical optimization, with an optimization premium of €8.7 per megawatt hour, exceeding the target range of €6 to €8.

Significant Divestments and Capital Gains

Fortum divested its recycling and waste business for €800 million, recording a tax-exempt capital gain of €176 million. Additionally, it sold a solar portfolio in India for €33 million, with a sales gain of €16 million.

Financial Stability and Shareholder Returns

Fortum's leverage decreased to 0.2x by the end of 2024, and the company proposed a dividend of €1.40 per share, along with a special dividend of €0.50 per share.

Progress in Decarbonization and Renewable Energy

Fortum made significant progress in its Espoo Clean Heat program, closed its last coal-fired unit in Suomenoja ahead of schedule, and commissioned the Pjelax wind farm in Finland.

Lowlights

Decline in Comparable Operating Profit

Fortum's comparable operating profit decreased to €257 million in Q4 2024 and €1,178 million for the full year, primarily due to lower power prices impacting the Generation segment.

Lower Nuclear Availability

Nuclear availability was 84% in 2024, below the target of 90%, due to unexpected reactor shutdowns and availability issues, impacting financial results.

Hedging and Market Conditions

The hedged share of rolling 10-year Generation volume was 18%, below the target of at least 20% by 2026, reflecting current challenges in securing long-term PPAs at favorable prices.

Company Guidance

In the recent call, Fortum provided comprehensive guidance on its financial performance and strategic initiatives for 2024. The company highlighted a year focused on optimizing core operations, divesting noncore assets, and implementing efficiency improvements, aiming for future growth despite challenging weather conditions. The Nordic power consumption increased by 9 TWh to 395 TWh, although Q4 consumption declined by 5 TWh to 107 TWh. Fortum's 2024 achieved power price was bolstered by successful hedging, with an optimization premium of €8.7/MWh exceeding the €6-8/MWh target. The company also improved in Consumer Solutions and Other Operations segments. The divestment of the recycling and waste business generated a tax-exempt capital gain of €176 million in Q4, with a total consideration of €800 million. Fortum plans a dividend of €1.40 per share, including a €0.50 special dividend, reflecting its strong balance sheet, with a 2024 year-end leverage of 0.2x. Fortum aims to reduce annual fixed costs by €100 million by 2025, excluding inflation, and is preparing for growth with a 2026 fixed cost base target of approximately €850 million, excluding a €30 million increase in Swedish property tax. The company continues to focus on decarbonization, renewable energy projects, and exploring new nuclear opportunities, although current Nordic power prices challenge the commercial viability of new nuclear investments.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.