Citi has moved Nordex SE to a buy rating from neutral and increased its target price to €50 from €48, pointing to unexpectedly strong margin momentum as a rationale for the upgrade. The broker notes the stock's 27% year-to-date gain has not fully reflected a sharper 45% uplift in consensus 2027 earnings per share estimates.
In its review, Citi calculates the shares trade at roughly 6.5 times estimated 2027 EV/EBITA. The bank also lifted its 2029 and 2030 EBITDA forecasts by 5% and 7%, respectively, attributing the revisions to stronger-than-anticipated German auction volumes.
Citi expects broader Street EBITDA upgrades of about 7% for 2027 and 16% for 2028. Those revisions are driven by a combination of improving margins from operating leverage and a favorable regional mix, the broker said.
On auction volumes, Citi lays out a path where German onshore wind auction volumes fall from 14.4 gigawatts in 2025 to 12 gigawatts in 2026, but then rise to proposed levels of 15 gigawatts in both 2027 and 2028. Those proposed volumes are expected to support Nordex's order intake for 2028-29, together with an improving outlook in the U.S. market. Citi's own model calls for 2028 orders of 12.25 gigawatts - a figure it notes is more than 10% above consensus.
While Citi acknowledged investor concerns that reforms to the German auction system could complicate auctions in 2027, the broker said the company's backlog provides support for 2027 and much of 2028. Combined with what it views as an undemanding valuation, Citi believes the shares already appear to discount a negative auction outcome.
Looking at margins, Citi said a favorable country mix in 2027-28 could allow for moderate additional gross margin gains. When paired with operating leverage, this could lift EBITDA margins above Nordex's stated mid-term guidance range of 10% to 12%. Citi's model points to an EBITDA margin of 12.5% in 2028, versus a consensus forecast of 11.4%.
For 2026 specifically, Citi expects Nordex's management to narrow its internal margin guidance toward the upper end by the time of third-quarter reporting.
The broker also increased the target 2027 EV/EBITA multiple to 10 times from its prior 9 times. At the same time, Citi outlined a set of risks that could weigh on the stock: negative revisions to the German auction schedule, greater-than-expected price compression that compresses outer-year margins, execution risk in the second half of 2026, and weaker cash generation.
Citi singled out the first German auction in February 2027 as a potential event of greatest risk for the shares, while reiterating its view that market pricing already appears to reflect the possibility of a disorderly outcome.
On market data, Citi reported Nordex shares closed at €40.60 on Sept. 7 and placed the company's market capitalization at €9.62 billion.
Context for investors
- The upgrade is driven by margin dynamics and auction-volume assumptions rather than changes to stated company guidance.
- Valuation metrics and backlog are central to Citi's view that downside from auction uncertainty is at least partly priced in.