Scatec (OB:SCATC): Assessing Valuation Following Major Philippine Floating Solar Win

Scatec (OB:SCATC) and its partner Aboitiz Renewables just secured a 20-year Power Purchase Agreement for a 68 MW floating solar project on the Magat reservoir in the Philippines. The deal marks a big step in the company's Southeast Asia strategy.

See our latest analysis for Scatec.

Alongside the new floating solar deal, Scatec also recently strengthened its balance sheet by issuing a green bond and outlining plans to reduce corporate debt. Investors have responded positively, with the company’s share price returning 25.3% year-to-date and a total shareholder return of 25.9% over the past year. This signals renewed momentum after a volatile few years.

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With new projects fueling optimism and the stock trading around 19% below analyst price targets, the key question is whether Scatec remains undervalued after recent gains or if the market has already factored in future growth.

Most Popular Narrative: 16.2% Undervalued

Scatec’s most widely followed narrative assigns a fair value significantly above its last close of NOK 101.5, suggesting substantial upside if projected growth materializes. This sets the framework for a bold, growth-focused outlook that heavily emphasizes future revenue expansion and operational execution.

High expectations are likely being placed on Scatec's ability to efficiently execute its large pipeline and ramp up its operating portfolio. However, persistent industry issues like grid constraints, project delays, and curtailments (as already hinted in Brazil and Ukraine) may disrupt revenue timing and compress overall returns.

Read the complete narrative.

Want to know what bold growth projections today’s price implies? The numbers behind this narrative rely on ambitious revenue targets, tightening margins, and a future profit multiple that could surprise even seasoned investors. Can Scatec really deliver on such aggressive estimates? Find out what assumptions anchor the story driving this fair value calculation.

Result: Fair Value of NOK121.14 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, execution missteps or unforeseen cost overruns on new projects could create challenges for the optimistic growth outlook and may impact future earnings.

Find out about the key risks to this Scatec narrative.

Build Your Own Scatec Narrative

If this growth story has you thinking differently, keep in mind that you can dive into the figures and shape your own perspective in just minutes. Do it your way

A great starting point for your Scatec research is our analysis highlighting 2 key rewards and 3 important warning signs that could impact your investment decision.

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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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