Vestas raises its margin target and starts a buyback, one bank stays sceptical

The short version

• Vestas reported revenue of 4.7 billion euros for the second quarter of 2026, up 26 percent, with an operating margin of 9.4 percent.
• The group raised its full year margin target range to seven to nine percent and announced a share buyback of 400 million euros.
• Bank price targets range from 110 to 215 Danish kroner, while the share traded at 28.02 euros on 14 August.

Vestas reported a 26 percent rise in revenue to 4.7 billion euros for the second quarter of 2026 on 12 August. The operating margin reached 9.4 percent. The Danish wind turbine maker then lifted its target range for the full year margin to seven to nine percent and launched a share buyback worth 400 million euros.

The share gained by a double digit rate, and rival Nordex benefited as well. On 14 August the stock traded at 28.02 euros, up 20.88 percent since the start of the year.

Barclays sticks with underweight

Barclays raised its price target on 13 August from 80 to 110 Danish kroner but kept its underweight rating. The responsible analyst Vlad Sergievskii puts the positive surprise down to a solid onshore turbine business and to favourable accounting effects. He still regards the quality of earnings as weak, and free cash inflow stayed moderate as a result. In his view the performance of this quarter will be hard to repeat.

Back in early May the same analyst pointed to capital consumption up 60 percent year on year, a surprising drop in average prices despite a more favourable product mix, and falling deliveries in the American onshore business. In mid May came further signs of rising risks in the installed offshore fleet.

Price targets between 110 and 215 kroner

On the same day Jefferies stuck to a buy recommendation with a price target of 215 kroner. Other banks also raised their targets.

A spread of this size is unusual for an established large company. It shows that the valuation depends less on the current result than on assumptions about the years ahead.

The reason lies in the structure of the industry. Wind turbines are delivered under contracts running for several years, often with service agreements spanning two decades. How a manufacturer books these contracts over their life, when it recognises costs and how it values risks, has a considerable influence on the reported result of a single quarter.

Legacy burdens work through slowly

Behind the argument over one quarterly result sits a bigger pattern. Wind turbine makers spent years winning orders in an environment where interest rates were low, material costs stable and supply chains functional. All three conditions have changed.

The result is contracts with fixed prices and variable costs. Where costs have risen more than calculated, losses build up that stretch across the entire contract term. Individual good quarters therefore do not automatically mean a turning point.

For wind projects the interest rate matters more than for other investments, because costs fall almost entirely at the start while returns flow over decades. If the rate rises by two percentage points, that changes the project return more than a change in the power price by the same percentage.

It is notable that the positive surprise came from the onshore business, while the scepticism is aimed at the offshore business. Onshore turbines are technically mature with thin but predictable margins. Offshore turbines are more demanding and harder to calculate in terms of risk.

Competition adds to this. Chinese manufacturers have won substantial market share outside Europe in recent years and offer prices that European suppliers struggle to match.

Frequently asked questions

How high was the Vestas margin in the second quarter of 2026

Vestas reached an operating margin of 9.4 percent in the second quarter of 2026 on revenue of 4.7 billion euros. Revenue was 26 percent above the year earlier level. On that basis the group raised its target range for the full year margin to seven to nine percent.

Why does Barclays rate Vestas underweight despite good numbers

Barclays raised its price target for Vestas on 13 August from 80 to 110 Danish kroner but kept the underweight rating. The bank attributes the strong quarter to the onshore business and to favourable accounting effects. It still regards the quality of earnings and the free cash inflow as weak.

How wide is the range of price targets for the Vestas share

Bank price targets run from 110 Danish kroner at Barclays to 215 Danish kroner at Jefferies. That is roughly double, and unusual for an established large company. The reason lies in the long contract terms, which strongly shape what a single quarter reports.

Why do interest rates matter so much for wind projects

In wind projects the costs fall almost entirely at the start, while the returns flow over decades. A rise in the interest rate of two percentage points therefore changes the project return more than a change in the power price by the same percentage. Contracts with fixed prices and variable costs reinforce that effect.

This analysis is for information only and is not investment advice.