VWS: Margin Expansion And Share Buyback Will Support Stronger Earnings Profile

The analyst price target for Vestas Wind Systems has been raised to approximately DKK 210 from about DKK 196, as analysts factor in slightly higher margin expectations despite modestly softer growth assumptions and a lower future earnings multiple.

Analyst Commentary

Bullish analysts highlight that the recent increase in the consolidated price target reflects growing confidence in Vestas Wind Systems' ability to execute on its backlog and improve profitability, even as headline growth expectations moderate. The upward revision from JPMorgan, in particular, supports the view that current valuation levels may not fully capture anticipated margin expansion and operational efficiencies.

At the same time, more cautious revisions, including the slight target reduction from Morgan Stanley, underline that near term volatility in orders and pricing remains a consideration. However, the balance of recent target moves still skews positive, which suggests that the market is gradually reassessing the long term earnings power of the business.

Bullish Takeaways

• Bullish analysts point to higher price targets as a sign that improving margins and cost discipline are beginning to translate into a more compelling risk reward profile for the shares.
• Positive revisions to target prices are being tied to expectations that Vestas can sustain execution on large scale projects, supporting more durable earnings growth and better cash generation.
• The reaffirmation of positive ratings from major institutions such as JPMorgan reinforces confidence that the current valuation still offers upside relative to long term return on capital and margin potential.
• Supportive commentary emphasizes that even with selective target trims from more neutral voices, the overall direction of estimates suggests growing conviction in Vestas' ability to convert its strong market position into higher, more stable profitability.

What's in the News

• Announced multiple fourth quarter orders in Germany and Poland totaling over 190 MW, including long term service agreements and deliveries stretching into 2027; this underscores a strong European onshore pipeline (company client announcements).
• Secured a 10 MW on site wind project for Cementeria Costantinopoli in Italy that will supply around one third of the cement plant's power needs; this reinforces Vestas' industrial decarbonization push in a key Southern European market (company client announcement).
• Commenced a share buyback program of up to 18 million shares, or 1.8% of issued capital, for a total of DKK 1,120 million between November 6 and December 17, 2025; this signals balance sheet strength and commitment to capital returns (buyback transaction announcement).
• Reported new undisclosed orders totaling 347 MW in the USA and Canada and 320 MW in the USA alone; this highlights continued demand in North America beyond visible named projects (company client announcements).
• Narrowed 2025 revenue guidance to EUR 18.5 to 19.5 billion; this reflects improved visibility on full year activity and order execution after the first nine months (corporate guidance announcement).

Valuation Changes

• The consensus analyst price target has risen modestly from DKK 196.09 to DKK 209.97, reflecting a slightly higher assessed fair value for the shares.
• The discount rate has increased slightly from 7.13% to 7.38%, implying a marginally higher required return and risk premium in the valuation model.
• Revenue growth has edged down from 14.08% to 13.77%, indicating a small reduction in medium-term top-line growth expectations.
• The net profit margin has improved slightly from 7.55% to 7.64%, pointing to a modestly more optimistic view on future profitability.
• The future P/E has decreased from 18.32x to 16.10x, suggesting a lower assumed earnings multiple despite higher fair value driven by margin and execution factors.