Banking Giant Turns 'Firmly Positive' On Orsted: 'Trump's Iran War Is Helping Offshore Wind'

Why It Matters

The upgrade signals renewed investor confidence in Ørsted’s ability to capitalize on accelerating offshore wind demand in both Europe and the United States, reshaping its growth trajectory and valuation.

Key Takeaways

• BofA upgrades Ørsted to Buy, raises price target to DKr 180 ($25)
• European offshore wind outlook improves after energy shock
• US legal risks for Ørsted’s projects near resolution
• Ørsted could add 1 GW/year US on‑shore renewables from 2028
• 7.8 GW under‑construction offshore projects remain on schedule

Pulse Analysis

The recent geopolitical turmoil in the Middle East has reignited Europe’s urgency to secure energy independence, propelling offshore wind to the forefront of policy agendas. The European Council’s accelerated renewables roadmap, coupled with high load‑factor wind technology, creates a fertile environment for developers like Ørsted. By positioning its supply chain primarily in Europe and sidestepping Chinese bottlenecks, Ørsted mitigates geopolitical supply risks, reinforcing its competitive edge as the continent races toward its 2030 decarbonisation goals.

Across the Atlantic, the United States is shedding its previous regulatory uncertainty for offshore wind. The Trump administration’s $1 billion settlement with TotalEnergies, allowing the French firm to exit U.S. leases, signals a pragmatic shift toward honoring existing contracts. Ørsted stands to benefit from this clarified stance, while also tapping into robust federal tax incentives for on‑shore projects. BofA projects the Danish group will develop roughly 1 GW of U.S. on‑shore capacity annually from 2028, split between wind and solar, providing a steady revenue stream that cushions offshore project timelines.

Financially, Ørsted’s balance sheet has markedly improved since its 2021 crisis, enabling it to pursue new auction opportunities slated for 2030 and beyond. The firm’s 7.8 GW pipeline of offshore farms remains on schedule, and its safeguarded equipment portfolio positions it to claim investment tax credits if operational by the decade’s end. This combination of operational resilience, policy tailwinds, and restored investor confidence underpins the Bank of America’s bullish outlook, suggesting Ørsted could reclaim its pre‑crisis market premium in the coming years.