Fortum: The prodigal son returns home with the new strategy
The company's Q4 operating profit was well above our expectations thanks to the Generation segment. The outlook for the segment (hedging prices) was also slightly higher than we had anticipated, supporting a slight positive change in our estimates for the coming years. As expected, the new strategy marks a homecoming for Fortum as a Nordic electricity company, and the balance sheet is already largely in good shape, so the company's risk profile has dropped a notch. We think the valuation level is attractive (2023 adj. P/E 12 and EV/EBIT 7x) but being stuck in Russia weakens the company's investment profile.
