Nordex Stock: Bullish Momentum Meets Valuation Skepticism

Nordex shares surge 54% YTD after Jefferies raises target to €54, but BofA downgrades on valuation and supply chain concerns. Strong fundamentals and future capital return planned.

Shares in wind turbine manufacturer Nordex have surged to a new 52-week high of €46.46, propelled by an optimistic analyst note just ahead of the company's first-quarter report. The stock's year-to-date gain now stands at an impressive 54.56 percent. This rally was ignited by Jefferies, which raised its price target from €50 to €54 and reiterated its Buy recommendation. Analyst Constantin Hesse pointed to a more favorable regulatory environment and improving fundamental data as key drivers, suggesting nearly 20 percent upside from recent levels around €45.

However, the analyst community is not aligned on the stock's prospects. Bank of America Securities recently downgraded Nordex from Buy to Neutral, despite maintaining a €50 price target. The bank's caution stems from valuation concerns, noting the stock now trades at 7.6 times its estimated 2027 EV/EBITDA. This represents a roughly 20 percent premium to the adjusted ten-year average of 6.4x. BofA argues that after such a strong run, there is limited attractive room for the share price to advance.

The fundamental business case for Nordex remains robust. The company reported full-year 2025 revenue of €7.55 billion, with its EBITDA margin doubling from 4.1 percent to 8.4 percent. In the final quarter, that margin climbed to 12.1 percent. Nordex solidified its market leadership in its home country, accounting for 31.5 percent of all newly connected onshore wind capacity in Germany for the second consecutive year. A supportive environment of high energy prices and political pressure to expand renewables continues to benefit the onshore turbine specialist, evidenced by new order wins in early April, including a 120-megawatt project in Turkey.

Beyond valuation, BofA highlighted specific operational risks. Freight costs for outgoing transports could account for up to one percent of revenue. More significantly, over 30 percent of components are sourced from China, creating a supply chain vulnerability the bank views as increasingly relevant given potential capacity reductions in Asia. A structural challenge also looms in Germany, where inadequate grid infrastructure has replaced permitting as the primary bottleneck for new wind installations. This means that even if planned auction volumes rise to over 12 GW annually, Nordex's ability to realize sales is increasingly dependent on external factors.

Looking forward, BofA projects revenues will rise to €9.24 billion in 2026 and €10.57 billion in 2027, accompanied by further margin expansion. Earnings per share are forecast to climb from €2.23 in 2026 to €2.89 in 2027 and €3.55 in 2028, up from €1.19 in the past year. Shareholders also have a future capital return to anticipate; Nordex plans to initiate an annual minimum distribution of €50 million starting in 2027, via dividend or share buyback. The start was delayed as distributable profits under German commercial law are not technically generated until the current 2026 financial year.

All eyes are now on the upcoming quarterly report due on April 27. The figures will provide a crucial test for the Jefferies thesis on improving profitability, showing whether recent order momentum is already translating to the bottom line. The company's ordinary annual general meeting in Hamburg follows shortly after on May 5.