July 31 (Bloomberg) -- Vestas Wind Systems A/S rose more than other benchmark stocks in Copenhagen trading today after HSBC Holdings Plc said the turbine maker is well position to benefit from a market recovery.
Vestas gained as much as 2.6 percent, making it today’s biggest winner in the Nasdaq OMX Copenhagen 20 index. The stock added 2 percent to 111.20 kroner at 9:48 a.m. local time with trading volume at 20 percent of the three-month daily average.
The global wind turbine market is set to improve as demand and prices pick up, HSBC said today in a note to clients. Vestas’s position as “the most geographically diversified” turbine maker means the company will benefit more than competitors from an increase in demand, the bank said. HSBC raised its price target on the share by 30 percent.
“Vestas’s strong order inflow in the second quarter and rising activity levels in the U.S. lead us to raise our long-term estimates,” HSBC analysts, including Sean McLoughlin, said in the note.
Vestas, which is competing with General Electric Co. for the No. 1 spot in the global wind turbine market, has lost money for two years as overcapacity in the industry pushed down prices. This year, the shares have more than tripled in value after an influx of new orders fueled investor optimism that the producer will return to profit.
“We see clear long-term value,” HSBC said today. “This justifies entry point at current levels despite re-rating.”
HSBC raised its share price estimate to 130 kroner from 100 kroner and repeated a recommendation that investors overweight holdings in the stock.
Vestas is due to report second-quarter earnings on Aug. 21.
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