Vestas Wind Systems A/S (VWS) fell to the lowest in almost nine years as Morgan Stanley and Jyske Bank A/S (JYSK) cut their price estimates for the largest wind-turbine maker.
Vestas slid as much as 4.7 percent to 47.83 kroner, the lowest price since May 30, 2003. Morgan Stanley cut its estimate for the Aarhus, Denmark-based company to 55 kroner from 66 on an “uncertain” outlook for the wind industry in the medium term and increased competition putting pressure on margins.
“We see few reasons to own the shares near term,” Morgan Stanley analysts Allen Wells and Bobby Chada wrote in a report. “We expect lower order inflow in 2012 to reduce visibility and drive lower prepayments, adding risk to working capital levels, which to us appear unsustainably low.”
Vestas has lost almost three quarters of its value since the start of 2011, as the company twice cut earnings forecasts and Chairman Bent Erik Carlsen and Chief Financial Officer Henrik Norremark quit. Vestas this year said it’s cutting 2,335 jobs and reorganizing to become a “leaner” business.
The company fell 2.1 percent to 49.16 kroner by 11:22 a.m. in Copenhagen, bringing the decline for the year to 21 percent.
Janne Kjaer, an analyst at Silkeborg, Denmark-based Jyske Bank, also today cut her price estimate on Vestas to 57 kroner from 65 kroner. She kept her “reduce” recommendation.
Arnaud Brossard, an analyst in Paris at Exane BNP Paribas, today reiterated his “underperform” rating on the stock.
Morgan Stanley maintained its “equal-weight” rating for Vestas, saying “the downside is becoming more limited.”
“Despite poor execution and challenging fundamentals, it remains the largest supplier of turbines globally, with a significant installed base, large order backlog and a solid after-market service business,” Wells and Chada wrote.
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