Investing.com -- Citi upgraded to “buy” from “neutral” and raised its target price to €50 from €48, citing better-than-expected margin momentum that has left the stock’s 27% year-to-date gain lagging a sharper 45% rise in consensus 2027 earnings per share estimates.
The shares now trade at about 6.5 times 2027 estimated EV/EBITA, Citi said. The broker raised its 2029/30 EBITDA estimates by 5%/7% on better German auction volumes.
Citi sees 7%/16% Street EBITDA upgrades for 2027/28, driven by stronger margin momentum from operating leverage and favorable regional mix.
German onshore wind auction volumes are set to fall from 14.4 gigawatts in 2025 to 12 gigawatts in 2026, but proposed volumes of 15 gigawatts in 2027 and 2028 should support Nordex’s 2028-29 order intake, alongside an improving U.S. picture, Citi said. The broker models 2028 orders of 12.25 gigawatts, more than 10% above consensus.
Citi said investor concerns that changes to the German auction system could complicate 2027 auctions are valid, but with backlog supporting 2027 and much of 2028, and valuation low, it thinks Nordex shares are discounting a negative outcome.
Citi said favorable country mix in 2027-28 can support moderate further gross margin upside, which, combined with operating leverage, should support an EBITDA margin potentially even above the company’s mid-term guidance of 10%-12%, reaching 12.5% in 2028 versus consensus of 11.4%.
For 2026, Citi expects management to narrow its margin range toward the upper end at the third-quarter stage.
Citi raised its target 2027 EV/EBITA multiple to 10 times from 9 times previously. Risks include negative revisions to the planned German auction schedule, greater-than-expected price compression driving outer-year margin compression, execution risk in the second half of 2026 and weaker cash generation, Citi said.
The broker said it would see the first German auction in February 2027 as potentially the event of greatest risk for the shares, but that the shares look to be discounting a disorderly outcome.
Nordex shares closed at €40.60 on Sept. 7, according to Citi. Nordex’s market capitalization was €9.62 billion, Citi said.