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Citi Upgrades Nordex to Buy on Margin Strength and Favorable German Outlook
Analysts at Citi have upgraded wind turbine manufacturer Nordex SE to “Buy” from “Neutral,” citing better-than-expected margin momentum and a valuation that has not kept pace with improving earnings forecasts. The bank raised its price target on the company's stock to €50 from a previous €48.
In a note to clients, Citi highlighted that while Nordex shares have gained 27% year-to-date, consensus earnings per share (EPS) estimates for 2027 have risen by a sharper 45%. The stock currently trades at approximately 6.5 times its estimated 2027 enterprise value to earnings before interest, taxes, and amortization (EV/EBITA), a valuation Citi finds attractive.
Margin Momentum and Earnings Upside
Citi sees potential for further earnings upgrades, forecasting a 7% and 16% increase to Street EBITDA estimates for 2027 and 2028, respectively. This optimism is driven by strong margin momentum from operating leverage and a favorable regional mix of projects.
The bank projects Nordex's EBITDA margin could reach 12.5% in 2028, exceeding both the company's mid-term guidance of 10%-12% and the current consensus of 11.4%. In its own modeling, Citi increased its 2029/2030 EBITDA estimates for Nordex by 5% and 7%.
German Auctions to Drive Order Intake
AdA key catalyst for the upgrade is the outlook for Germany's onshore wind auctions. While volumes are expected to dip from 14.4 gigawatts (GW) in 2025 to 12 GW in 2026, proposed volumes of 15 GW for both 2027 and 2028 are expected to significantly support Nordex’s order intake, according to Citi.
Combined with an improving picture in the United States, Citi models 2028 orders of 12.25 GW, which is more than 10% above the market consensus. Analysts believe the current share price is already discounting a negative outcome from potential changes to the German auction system in 2027.
Valuation and Potential Risks
Reflecting its more bullish outlook, Citi raised its target 2027 EV/EBITA multiple for Nordex to 10 times from 9 times. However, the bank also outlined several risks to its thesis, including:
- Negative revisions to the planned German auction schedule.
- Greater-than-expected price compression that could hurt margins in outer years.
- Execution risk in the second half of 2026.
- Weaker-than-anticipated cash generation.
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