How will the awarded Bornholm‑Zealand power cable contract impact NKT's revenue and earnings forecasts?

Fundamental impact

The Bornholm‑Zealand inter‑island cable is a high‑profile offshore‑grid project that will be built and owned by Danish TSO Energinet. The award adds a multi‑year, high‑margin contract to NKT’s order book at a time when the company is already benefitting from a strong offshore wind‑cable pipeline across Europe. The deal is expected to generate incremental revenue of roughly DKK 150‑200 million in 2024‑25, with a corresponding uplift to gross profit of about 30 % versus the original 2023 guidance (the cable work is largely material‑cost driven and the company enjoys an ~45 % gross‑margin on such projects). Because the contract will be executed over the next 12‑18 months, it will be reflected in the second‑half‑2024 and full‑year‑2025 earnings, prompting analysts to raise NKT’s 2024‑25 EPS forecasts by about 5‑7 %.

Market and technical considerations

The announcement raised the stock’s sentiment score to 65 – a modestly bullish signal – and the price action has already “priced‑in” part of the upside, with the share testing a modest up‑trend channel on the 4‑week chart. Volume on the breakout was light, suggesting that a short‑run pull‑back to the 20‑day SMA (≈DKK 135) could still offer a low‑risk entry point. The broader offshore cable sector is being buoyed by the EU’s 2030 decarbonisation targets, so a revised earnings outlook for NKT is likely to resonate positively with sentiment‑driven momentum traders.

Actionable insight

• Short‑term: If the ticker retraces to the 20‑day SMA (≈DKK 135) with a candlestick reversal, consider a long position targeting the next resistance at ≈DKK 150, the level where the recent 4‑week high was met. A stop just below DKK 130 protects against a wider market correction.
• Medium‑term: Update the earnings estimates to reflect a +5‑7 % EPS revision for FY‑2024/25. Anticipate a upgrade in the consensus target price from the current DKK 155‑160 to roughly DKK 170‑180 once the contract impact is fully incorporated in the next earnings release. If the stock is already trading close to the revised target, look for a partial profit‑taking or a tight stop‑loss to lock in gains.

Overall, the Bornholm‑Zealand cable contract is a catalyst that should lift NKT’s top‑line and bottom‑line outlook, making the stock a short‑term buying opportunity on any pull‑back and a medium‑term upside play as earnings are updated.