Valuation of Vestas Wind Systems A/S

Cecilie Rothberg Kristensen

Student thesis: Master thesis


The objective of this thesis is to determine the theoretical fair value of Vestas Wind Systems A/S (Vestas) as of 31st December 2019. In order to achieve the main objective, a strategic and financial analysis of the company is conducted. The strategic analysis includes an external analysis of Vestas’ macro environment and industry, in which the PEEST model and Porter’s Five Forces, respectively, are applied. The focus of the financial analysis is a deeper understanding of Vestas’ profitability and key value drivers. These value drivers are identified through a decomposition of the reformulated financial figures following the DuPont framework. Together these analyses constitute the basis for predicting Vestas’ future performance. The valuation is performed using the discounted cash flow (DCF) method and the economic value added (EVA) method. While the DCF serves as the primary method, EVA is applied to underpin and crosscheck the calculated value estimate. When applying the DCF method, the estimated market value of equity of Vestas is derived to EUR 19,898 million, corresponding to an estimated price per share of EUR 100.41. Comparing this value with the observed market value per share on the 31st December 2019 yields the conclusion that Vestas is undervalued with approximately 10 percent.

EducationsMSc in Applied Economics and Finance, (Graduate Programme) Final Thesis
Publication date2020
Number of pages109