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Fortum: The direction is right, the valuation low
The Q3 result exceeded our expectations and the rapid increase in hedging prices for 2023 supported our earnings estimates. In the big picture, the report confirmed that the company's liquidity position and balance sheet structure are in order after the finalization of the Uniper arrangement. A more persistent problem is Russia, which is depressing acceptable valuation and complicating debt market activity. We still consider the risk/return ratio of the stock attractive at the current low valuation.
Fortum is active in the energy sector. In addition to the provision of electricity, a number of technical solutions are offered in heat optimization as well as apps that are used to keep track of energy consumption. The company also provides charging stations for electric cars. The largest activity is found around the Nordic market. The company was founded in 1998 and is headquartered in Espoo.
Read more on company pageKey Estimate Figures2022-11-11
| 2021 | 22e | 23e | |
|---|---|---|---|
| Revenue | 6,422.0 | 8,820.0 | 9,542.9 |
| growth-% | -86.9 % | 37.3 % | 8.2 % |
| EBIT (adj.) | 1,429.0 | 1,730.0 | 2,682.8 |
| EBIT-% (adj.) | 22.3 % | 19.6 % | 28.1 % |
| EPS (adj.) | -2.43 | -2.45 | 2.12 |
| Dividend | 1.14 | 0.38 | 1.14 |
| Dividend % | 4.2 % | 2.0 % | 5.9 % |
| P/E (adj.) | neg. | neg. | 9.2 |
| EV/EBITDA | 6.7 | 6.5 | 5.4 |
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