How Does Vestas’s Recent Global Partnership News Impact Its 2025 Valuation?

• Ever wondered if Vestas Wind Systems is fairly priced, or if the market’s missing something beneath the surface? You’re in the right place to cut through the noise and put its value in context.
• The stock has climbed 13.4% in the past week and a strong 43.3% year-to-date, signaling shifting investor sentiment and possibly fresh growth potential.
• Recent headlines around new wind project contracts and expanded global partnerships have fueled optimism among stakeholders. These news items suggest that market confidence in Vestas’s future is building, but there is more to the story than just momentum.
• Vestas scores 3/6 on our valuation checks, meaning it is undervalued in three out of six areas we review. Let’s break down what really goes into valuing Vestas and, by the end of this article, introduce an even deeper way to approach stock valuation.

Vestas Wind Systems delivered 45.1% returns over the last year. See how this stacks up to the rest of the Electrical industry.

Approach 1: Vestas Wind Systems Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model estimates Vestas Wind Systems’ intrinsic value by projecting its future free cash flows and discounting them back to present-day values using a risk-adjusted rate. This helps investors see what the company is truly worth today based on its long-term earning power.

Currently, Vestas generates trailing twelve-month free cash flow of approximately €1.23 billion. According to analyst estimates, free cash flow is projected to grow steadily over the next decade, reaching about €1.81 billion by 2035. While analyst forecasts typically extend just five years, additional years are extrapolated to form a more comprehensive picture. These projections factor in both historical growth and reasonable expectations for future performance.

Based on these projections, the DCF model assigns Vestas an intrinsic fair value of €186.21 per share. This figure is roughly 19.4% above the current market price, suggesting that Vestas is trading at a meaningful discount to what its long-term cash flows justify.

In short, the DCF analysis indicates that Vestas Wind Systems is currently undervalued by the market. This may offer investors potential upside if the company reaches its projected cash flow growth.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Vestas Wind Systems is undervalued by 19.4%. Track this in your watchlist or portfolio, or discover 848 more undervalued stocks based on cash flows.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Vestas Wind Systems.

Approach 2: Vestas Wind Systems Price vs Earnings (P/E Ratio)

The Price-to-Earnings (P/E) ratio is a popular valuation tool for profitable companies like Vestas Wind Systems because it directly connects a company’s share price with its earnings power. For investors, it puts profit expectations into context, making it easier to compare across companies and gauge if the market is paying a high or low price for current earnings.

What’s considered a normal or fair P/E ratio depends on factors like anticipated earnings growth and risk. Companies expected to grow rapidly or operate with less uncertainty often command higher multiples, while more mature or riskier businesses might trade at lower P/E ratios.

Vestas Wind Systems is currently trading at a P/E ratio of 26.3x. That is below the average for its industry peers at 33.3x and also under the Electrical industry average of 31.7x. However, rather than simply comparing to these benchmarks, Simply Wall St calculates a proprietary Fair Ratio of 28.0x for Vestas by factoring in growth prospects, profit margins, its industry, market cap, and unique risk profile. This holistic approach tends to give a more accurate view than blunt comparisons with peers or industry averages alone.

Right now, Vestas’s P/E multiple is just shy of this Fair Ratio at 26.3x compared to 28.0x, suggesting the market is pricing the stock in line with its fundamentals and outlook.

Result: ABOUT RIGHT

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1407 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Vestas Wind Systems Narrative

Earlier, we mentioned there is an even better way to understand valuation, so let's introduce you to Narratives, a smarter and more dynamic way to make investment decisions.

A Narrative is the story or perspective you bring to a company, combining your assumptions for its future revenue, profits, and margins with a financial forecast that connects directly to a fair value. Rather than relying solely on fixed numbers or generic ratios, Narratives empower you to reflect your view on Vestas, make sense of new information, and see how those beliefs translate into a potential price target.

Available to millions of investors directly within Simply Wall St’s Community page, Narratives are simple to use and continuously update as news, earnings, or key announcements hit the market. They help you decide whether to buy or sell by comparing the Fair Value implied by the Narrative to the stock’s current price, giving your investment decisions context and confidence.

For Vestas Wind Systems, some investors may share the most optimistic Narrative, expecting earnings growth to €1.9 billion and a price target of DKK195.99, while others may adopt a more cautious stance, anticipating €752.2 million in earnings and a target of just DKK60.0. Narratives let you instantly translate those perspectives into actionable insights, all in one place.

Do you think there's more to the story for Vestas Wind Systems? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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