Skip to Content
Morningstar

Northland Power: Pruning Development Portfolio With Sale of Nordseecluster

""
Securities In This Article
Northland Power Inc
(NPI)

We maintain our CAD 35 fair value estimate for no-moat Northland Power NPI following the sale of its stake in an offshore wind development portfolio. We view shares as undervalued following weakness year to date.

On May 25, Northland Power announced the sale of its 49% stake in the Nordseecluster of offshore wind projects (consisting of three projects totaling 1.6 gigawatts of gross capacity) to partner RWE. We view the announcement as having a negligible impact on our fair value estimate given the limited sale price (EUR 35 million).

Stepping back, we view the sale announcement as consistent with Northland’s past comments of high-grading its 19-gigawatt development portfolio. Offshore wind cost inflation has placed pressure on project returns, and developers, such as Northland, are being increasingly disciplined in making positive investment decisions. We see the sale as reducing Northland’s medium-term capital needs while leaving ample development projects to grow its portfolio.

The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.

More in Stocks

Industrials: Sector Offers Investment Opportunities as Performance Lags Broader Market

Our top industrial picks are Honeywell, UPS, and Huntington Ingalls.
Brian Bernard, CFA, CPA

Consumer Defensives: Even Amid Macro Pressures, Deals Permeate the Landscape

Our top picks for this sector include Estee Lauder, WK Kellogg, and Kraft Heinz.
Erin Lash, CFA

33 Undervalued Stocks

Here’s the new list of Morningstar’s top underpriced analyst picks to buy for the third quarter of 2024.
Susan Dziubinski

About the Author

Brett Castelli

Equity Analyst
More from Author

Brett Castelli is an equity analyst, energy and utilities, for Morningstar Research Services LLC, a wholly owned subsidiary of Morningstar, Inc. His coverage focuses on clean energy companies across renewables and emerging technologies.

Before joining Morningstar in 2021, Castelli spent more than eight years in various analyst roles for TortoiseEcofin, a boutique asset manager. His coverage focused on North America and included companies within traditional energy, electric utilities, and renewables. Additionally, he assisted with the firm's environmental, social, and governance efforts and played an important role in integrating ESG into the investment process. Castelli spent a year at the firm's London office following an acquisition.

Castelli holds a bachelor's degree in finance from the University of Missouri's Trulaske College of Business. He also holds the Chartered Financial Analyst® designation.

Sponsor Center