On Tuesday, Citi reiterated its Buy rating on Vestas Wind Systems A/S (VWS:DC) (OTC: VWDRY), with a stock price target of DKK315.00. The firm's positive outlook for the company is largely based on anticipated growth and profitability in the US market, where Vestas is a leading supplier of onshore wind turbines.
The analyst at Citi highlighted that the upcoming investor day for GE Vernova™ on March 6th is expected to provide further insights into the US onshore wind market. This event may shed light on volume expectations and the potential benefits that could arise from Inflation Reduction Act (IRA) tax credits.
Given that GE has been a dominant player in the US onshore wind segment, the insights from their investor day are seen as particularly relevant for the industry.
Citi points out that the 45X Advanced Manufacturing Credits, which are part of the IRA, represent an underappreciated factor that could significantly enhance future profits for onshore wind companies, including Vestas. These credits are seen as a direct financial incentive to bolster the production and deployment of wind energy solutions.
In anticipation of the GE investor day and its implications for the wind energy sector, Citi has initiated a positive Catalyst Watch for Vestas. This move suggests that the firm expects upcoming developments to potentially act as a positive driver for Vestas' stock performance.
Vestas, currently the second-largest supplier of onshore turbines in the US, is poised to capitalize on these market dynamics. The company's strategic position and the potential uplift from policy incentives are key components of Citi's Buy rating.
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