Citi upgrades Nordex on margin momentum, sees further earnings upside

Citi has upgraded Nordex SE to 'buy' from 'neutral,' lifting its price target to €50 from €48. The move reflects stronger-than-expected margin momentum, with the stock's 27% year-to-date advance trailing a sharper 45% jump in consensus 2027 EPS estimates.

According to Citi, the shares are currently trading at roughly 6.5 times estimated 2027 EV/EBITA. The brokerage also increased its 2029 and 2030 EBITDA forecasts by 5% and 7%, respectively, citing improved German auction volumes.

Citi anticipates 2027 and 2028 EBITDA upgrades of 7% and 16% versus Street expectations, underpinned by margin strength from operating leverage and a favorable geographic mix.

Citi noted that German onshore wind auction volumes will decline from 14.4 gigawatts in 2025 to 12 gigawatts in 2026, yet proposed volumes of 15 gigawatts for both 2027 and 2028 should bolster Nordex’s order intake for 2028-29, aided by an improving outlook in the U.S. The broker is modeling 2028 orders of 12.25 gigawatts, which is over 10% higher than consensus.

Citi acknowledged that investor worries about German auction-system changes potentially complicating 2027 auctions are legitimate. However, given that backlog covers 2027 and much of 2028, along with the stock's low valuation, it believes Nordex shares are already pricing in a negative scenario.

Citi sees a favorable country mix over 2027-28 driving moderate additional gross margin upside, which together with operating leverage could push the EBITDA margin above the company's mid-term guidance range of 10%-12%—potentially reaching 12.5% in 2028 against a consensus of 11.4%.

For 2026, Citi expects management to tighten its margin guidance toward the upper end of the range when it reports third-quarter results.

Citi increased its target 2027 EV/EBITA multiple to 10 times, up from 9 times previously. The broker flagged risks including adverse revisions to the German auction calendar, more pronounced price compression leading to margin erosion in later years, execution risks in the second half of 2026, and lower cash generation.

The brokerage views the initial German auction scheduled for February 2027 as potentially the biggest risk event for the shares, but it says the current price appears to be discounting a disorderly outcome.

Nordex shares closed at €40.60 on September 7, according to Citi, which also put the company's market capitalization at €9.62 billion.