Investing.com - Barclays upgraded Orsted (ORSTED:DC) (OTC:DOGEF) from Underweight to Equalweight on Wednesday and raised its price target to DKK160.00 from DKK117.00. The stock has shown strong momentum with a 33% gain over the past six months and a 27.5% year-to-date return, though InvestingPro data suggests the shares remain slightly undervalued at current levels.
Analyst Dominic Nash cited management's efforts to stabilize the balance sheet, rationalize the portfolio, focus on capital discipline in core markets and prioritize returns over volume.
The firm said a second gas crisis in five years should support renewable policy, while a new capital cycle underpins a recovery in earnings growth. This outlook aligns with the company's attractive PEG ratio of 0.46, indicating the $31.9 billion renewable energy company trades at a low price relative to its near-term growth prospects. InvestingPro offers 13 additional ProTips for Orsted, including insights on cash flow and profitability trends.
Barclays identified potential for further strategic change from three company policy levers: moving to SPV-level debt structure rather than holding company structure, bidding for CFDs only once visibility is secured, and greater openness to having joint ventures with competitors.
The upgrade reflects the analyst's view that management actions position the company for improved performance in its core markets.
In other recent news, Orsted has agreed to sell its European onshore business to Copenhagen Infrastructure Partners in a $1.7 billion deal. This transaction includes 578 megawatts of operational capacity and 248 megawatts under construction, alongside a development pipeline across several European countries. In addition, Orsted received a boost from BofA Global Research, which upgraded the company's stock to "buy," citing increased momentum for fossil fuel independence in Europe. Similarly, Kepler Cheuvreux upgraded Orsted's stock rating to "buy" and raised its price target, highlighting potential valuation upside.
Furthermore, a federal judge has allowed Orsted to resume work on its Sunrise Wind project off the coast of New York, reversing a previous halt. This ruling represents a legal setback for former President Donald Trump's offshore wind policy. Orsted's Sunrise Wind project had been challenging a lease suspension order from the U.S. Department of the Interior. The company argued that the suspension order violated applicable law and posed substantial harm to the project if it continued. These recent developments reflect significant changes and opportunities for Orsted in the renewable energy sector.