Vestas Earnings: Return to Profitability Supported by One-Off Disposal; Raising Our Fair Value

No-moat Vestas reported EBIT of EUR 40 million during the first quarter, its first profitable quarter since fourth-quarter 2021. While the EUR 147 million sale of its converter business positively distorted results, underlying performance also appears to be improving as higher pricing and lower provisions will support an improvement in its profitability from the lows of 2022. We raise our fair value estimate to DKK 197 per share as its short-term profitability outlook has improved, driven by the factors above. Despite an improved outlook, our preferred way for investors to get exposure to the wind energy theme remains wind energy utilities and producers of wind energy. We view shares as fairly valued.