Vestas Wind Systems A/S jumped to the highest price in 14 months in Copenhagen as banks raised their share price estimates amid signs the turbine maker is succeeding with its plan to end losses.
Vestas surged as much as 8.6 percent to 65 kroner, the highest level since March 19, 2012. The stock rose 7.8 percent to 64.50 kroner at 10:56 a.m. in the Danish capital with volume at 105 percent of the three-month daily average.
Vestas reported a narrowing loss last week after progressing more than half-way into a two-year program to return to profit. The turbine maker started the initiative after stronger competition depressed prices. Credit Suisse Group AG said today the measures are working, and it raised its price estimate on the share by 83 percent. The bank also raised its recommendation for the first time in five years.
“Cost cutting is (finally) showing through,” Mark Freshney, an analyst at the bank, wrote in a note to clients. “There is more set to come later in 2013.”
Freshney raised his price estimate to 55 kroner from 30 kroner and lifted his recommendation to neutral from underperform. Other banks that raised their estimates after last week’s earnings include Alm. Brand A/S, Nordea Bank AB and Svenska Handelsbanken AB, according to data compiled by Bloomberg.
Vestas reported on May 8 that its net loss for the three months ending March 31 shrank to 151 million euros ($198 million) from 162 million euros a year earlier. Free cash flow rose by 235 million euros to a deficit of 60 million euros in the quarter, according to the Aarhus, Denmark-based company.
Vestas shares gained 13 percent on the day of the earnings report. The stock has doubled in value so far this year after having declined in the previous three years.