Hold by alpha (07/02/2024)
- 13.50 +14.75% by 15/02/2025
Fortum is an energy supplier with base-load and flexible energy capacity operating in the Scandinavian market. 90% of EBITDA results from 45TWh low CO2 hydro and nuclear power generation.
The company reported €1.32/share for continuing business that gives a valuation of 9x PE at €12. This included a strong Q1'23. A conservative forward looking estimate is 10-12x PE.
2023 dividend €1.15 results in a 9% yield with two installments in 2024. Which I also expect for the coming two years given the capital allocation and CAPEX.
Fortum owns future-proof energy capacity and has a strong balance-sheet. I expect the company to improve margins and ROE as the demand for reliable green-electricity continues to grow. A long-term hold with a good dividend yield.1