Fortum Upgraded by J.P. Morgan, Goldman Sachs on High-Value Google Nuclear Power Deal

J.P. Morgan and Goldman Sachs both upgraded their ratings for Fortum OYJ to “neutral” this week, citing the Finnish utility's landmark power purchase agreement (PPA) with Google. The banks highlighted that the long-term deal for nuclear power was struck at a price well above current market forwards, signaling strong demand from data centers.

Wall Street Reassesses Fortum

Both investment banks significantly raised their price targets for the utility, moving from bearish to neutral stances. The upgrades reflect a revised outlook on the Nordic power market and Fortum's earnings potential.

• J.P. Morgan raised its rating to “neutral” from “underweight,” increasing its December 2027 price target to €24.30 from €17.80. The bank stated it had previously underestimated the upside from data center power demand.
• Goldman Sachs moved its rating to “neutral” from “sell,” lifting its 12-month price target to €25.50 from €16.50.

Inside the Google Power Deal

The agreement, announced Tuesday, commits 500 megawatts—or 50% of the capacity—of Fortum's Loviisa nuclear plant to supply a Google data center through 2050. Analysts noted the PPA's favorable terms as a key driver for the upgrades.

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J.P. Morgan estimated the contract price at around €80 to €90 per megawatt-hour, a substantial premium compared to Nordic forward prices in the €50s. Goldman Sachs calculated the premium at €32 per megawatt-hour above the curve, equivalent to 1.6 times the current 2030 Finnish power price. The agreement also includes a memorandum of understanding to explore new nuclear and renewable capacity.

Financial Impact and Outlook

The deal is expected to have a material impact on Fortum's financial performance. Goldman Sachs projects the PPA will lift Fortum’s group comparable return on net assets by about 1.4 percentage points, implying a €127 million annual improvement in return.

Furthermore, Goldman Sachs anticipates the agreement will add approximately 30% to its 2030 earnings per share (EPS) estimate for Fortum and expand the company's balance sheet available for investment by about €2 billion. In a similar revision, J.P. Morgan raised its own EPS estimates for fiscal years 2026, 2027, and 2028 to levels significantly above the Bloomberg consensus.