U.S. onshore wind orders are recovering, and Goldman Sachs sees upside to earnings for Vestas and Nordex

Overview

This report focuses on order progress by European wind turbine manufacturers Vestas Wind Systems A/S and Nordex SE in the U.S. onshore wind market. Goldman Sachs believes that although uncertainty remains around Section 232-related policy, the U.S. onshore wind market is already showing gradual signs of recovery. New orders from Vestas and Nordex, rising U.S. PPA prices, and improved pricing driven by higher equipment costs and longer wait times together increase the potential upside to earnings outlooks.

Core views

The core view is that demand for U.S. onshore wind is recovering, and improved orders are not yet fully reflected in Goldman Sachs estimates; PPA prices have risen from about $30/MWh to above $70/MWh, improving project returns; Vestas, with its scale, geographic diversification, cash flow, and balance sheet advantages, is the best-positioned company in Goldman Sachs' wind manufacturer coverage; Nordex is benefiting from the same industry tailwinds, with order growth and pricing improvement driving margin recovery and balance sheet repair. Goldman Sachs maintains Buy ratings on both Vestas and Nordex.

Analysis framework

The report combines order announcements, changes in U.S. PPA prices, and shifts in wind equipment supply-demand dynamics and reshoring-driven costs and delivery cycles to assess the potential impact of a U.S. market recovery on earnings forecasts for Vestas and Nordex. On valuation, Vestas uses a weighted DCF and M&A valuation approach, while Nordex uses DCF valuation, together with assumptions on WACC, target multiples, 2030E EBIT, and medium-term margin improvement.

Methodology notes

• Valuation methodsDCF

  Discounted cash flow valuation

  In Vestas' target price, DCF carries an 85% weight, with a DCF valuation of Dkr213/share using a 7.8% post-tax WACC; Nordex's target price is based on DCF valuation using a 7.9% post-tax WACC.

• Valuation methodsM&A估值

  M&A scenario valuation

  In Vestas' target price, M&A valuation carries a 15% weight, with a valuation of Dkr364/share based on applying a 22x multiple to 2030E EBIT and discounting back to 2026E.

• Factor frameworkGS Factor Profile

  Comparison of growth, financial returns, valuation multiples, and composite percentile rankings

  Goldman Sachs Factor Profile compares individual stocks with covered stocks and industry peers across growth, financial returns, valuation multiples, and composite metrics.

• M&A probabilityM&A Rank

  M&A target probability ranking

  Goldman Sachs uses M&A Rank from 1 to 3 to assess the probability that a company becomes an acquisition target; rank 1 indicates high probability, 2 medium probability, and 3 low probability.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Vestas Wind Systems A/S

  Core covered name and a primary beneficiary of the recovery in U.S. onshore wind orders.

  Strengths

  Scale and geographic diversification, cash flow generation, strong growth profile, and a solid balance sheet; reaching offshore breakeven could improve the likelihood of achieving FY2027 medium-term targets.

  Weaknesses

  Valuation and earnings recovery depend on order growth, margin expansion, and de-risking of the offshore business ramp-up.

  Comparison

  Goldman Sachs believes Vestas is the best-positioned company in its wind manufacturer coverage.

  Risks

  Declines in global onshore or offshore wind installations, U.S. installations coming in below expectations, lack of M&A in the wind sector reducing the relevance of the M&A component in valuation, and a significant drop in commodity prices weakening wind's profitability relative to thermal power technologies.

• Nordex SE

  A beneficiary of the recovery in U.S. onshore wind orders and improved pricing.

  Strengths

  Order growth and better pricing support margin recovery; a stronger balance sheet could increase flexibility for dividends, buybacks, reserves, or reinvestment.

  Weaknesses

  Delivery of the medium-term outlook depends on continued order growth in the U.S. and Germany and further margin improvement.

  Comparison

  Benefits from the same onshore wind industry tailwinds as Vestas, though the report gives more emphasis to Vestas' competitive positioning.

  Risks

  Declines in global installation volumes, changes in government policy, and falling commodity prices.

Key data

• Vestas new U.S. orders869 MWLatest announced undisclosed U.S. onshore wind project order.
• Vestas cumulative U.S. orders1.5 GW since Q2; 5.2 GW over the past four quartersShows continued recovery in U.S. onshore wind orders.
• Nordex confirmed U.S. orders0.5 GWThree confirmed orders, plus 1.1 GW of conditional orders received in 2H 2025.
• Nordex U.S. market share targetabout 20%The company aims to restore its previous U.S. market share level.
• U.S. PPA pricesfrom about $30/MWh to above $70/MWhPrice change from 2020-21 to the present, supporting improved returns for U.S. renewable energy projects.
• Vestas rating and target priceBuy; 12-month target price Dkr236Target price derived from a combination of 85% DCF and 15% M&A valuation.
• Nordex rating and target priceBuy; 12-month target price €53.2Target price based on DCF valuation.
• Vestas capital return assumption€5bn cumulative buybacks from FY2026 to FY2030Goldman Sachs estimates include expectations for higher medium-term cash returns.

Impact & implications

If U.S. orders continue to materialize, there is room for upward revisions to earnings forecasts for Vestas and Nordex, especially as current estimates do not yet include substantial new U.S. installations. Higher PPA prices and less competition can improve project economics, helping turbine manufacturers secure better pricing and higher-quality orders; however, policy, global installation volumes, and commodity prices remain key uncertainties.

Risks

• A decline in global onshore or offshore wind installations could weigh on order intake.
• New U.S. installations coming in below expectations would weaken the upside risk highlighted in this report.
• Changes in government policy, especially policy uncertainty in the U.S., could affect order conversion and project economics.
• A significant decline in commodity prices could reduce the profitability appeal of wind power relative to thermal power technologies.
• If M&A activity is lacking in the wind sector, the M&A valuation component in Vestas' target price could become less meaningful.

What to watch

• The pace of Vestas' follow-on U.S. orders and whether orders over the past four quarters continue to expand.
• Conversion of Nordex's confirmed U.S. orders and its 1.1 GW of conditional orders.
• Whether U.S. PPA prices remain above $70/MWh and whether higher prices continue to translate into project returns.
• Changes in Section 232 and other U.S. policy uncertainties.
• Progress in Vestas' offshore wind ramp-up, capex peaking, and FY2027 FCF expansion.
• Nordex's margin recovery, balance sheet improvement, and cash return policy.