What macroeconomic or sector-specific risks could affect the achievement of the updated outlook?

Macroeconomic & sector‑specific headwinds

The updated 2025 outlook for NKT (a leader in high‑voltage cable and grid‑infrastructure solutions) is bullish, but several macro‑level factors could derail the assumptions behind the guidance. A sustained slowdown in global GDP growth—particularly in Europe and China, where most of NKT’s revenue comes from utility upgrades and renewable‑energy projects—could delay or cancel large‑scale transmission projects. A resurgence of inflation, prompting central banks to keep policy rates higher for longer, would raise borrowing costs for both utilities and industrial customers, potentially compressing NKT’s order flow. Moreover, any sharp appreciation of the euro or Danish krone versus the USD could reduce the company’s export margins, as a significant portion of its sales are denominated in foreign currencies.

Sector‑specific risks

The grid‑infrastructure sector is increasingly exposed to supply‑chain constraints and raw‑material price volatility (copper, aluminum, specialty plastics). Any tightening of metal supply chains or spikes in commodity prices would increase NKT’s cost base and pressure margins. Additionally, the rapid shift toward offshore wind and high‑voltage direct current (HVDC) technologies raises competitive pressures: new entrants or aggressive pricing from rivals (e.g., Prysmian, Nexans) could erode market share, especially if they secure large government‑backed renewable‑energy contracts. Regulatory changes—such as revised EU grid‑integration standards or tightened environmental rules—could force redesigns or additional certification costs, further affecting the timeline and profitability of projects.

Trading implications

Given the positive sentiment (10) and an upgraded outlook, the stock likely enjoys short‑term upside, but traders should monitor the Eurozone PMI, ECB rate decisions, and commodity‑price indices (e.g., LME copper) for early warning signs. A breach of the 50‑day EMA on the daily chart or a failure to hold the 20‑day EMA could signal that the bullish narrative is weakening, prompting a tighter stop‑loss (e.g., 5‑7 % below current price). Conversely, a confirmation of the trend (price above 20‑day EMA and bullish volume) may justify a modest long‑position, with a target near the previous high and a disciplined exit if macro data (e.g., GDP revisions) or a sudden commodity price surge occurs. Diversify exposure and consider hedging via currency forwards (EUR/DKK) if the euro’s trajectory becomes a material risk to NKT’s earnings.