Addition to portfolio: Cadeler A/S ($CDLR)

Added Cadeler A/S ($CDLR) to my portfolio today at $22.10

Stock Price (May 5 close): $22.20

Market Cap: $1.92B

Investor Presentation Annual report 2024 [Corporate Presentation]

FY 2024 annual report [CADLR - Annual Report 2024]

Cadeler A/S engages in offshore wind farm installation, operations, and maintenance services in Denmark. The company engages in the transportation, installation, and maintenance of offshore wind turbine generators and platform topsides/substations; maintenance of offshore structures and platforms; offshore construction, decommissioning, and accommodation and crane support within the renewable space; heavy lift and project cargo; and salvage assistance, as well as transport and installation of wind turbine foundations. It owns and operates five offshore jack-up windfarm installation vessels.

Cadeler A/S was founded in 2008 and is headquartered in Copenhagen, Denmark.

In short, the company builds wind turbines at sea using special vessels like below. The company has 6 such vessels and is building 5 more. Two of the new vessels are coming as early as 2025, one in 2026, two more in 2027 and later.

The company is expanding its fleet due to order growth and backlog of projects which reached  EUR 2.5 Billion.

Indeed, Cadeler A/S after some ups and downs in revenues over the past year, the company has seen a solid increase in revenues and earnings in 2024: an increase from EUR 108.6 million in 2023 to EUR 248.7 million in 2024, a 130% year-on-year increase. With a backlog of $2.5 billion, this gives them 10 years of work if they maintain current pace of revenue. But, as they are building new vessels, the analysts are predicting a continued increase in revenues in the next few years. The 6 analysts that cover the company, predict $1 billion EUR in revenues by the end of 2027.

Converting the increase in earnings into EPS shows the following results:

2024 reported: 0.19 EUR (0.21 USD)

2025 predicted: 0.45 EUR (0.51 USD)

2026 predicted: 0.92 EUR (1.04 USD)

2027 predicted: 1.42 EUR ($1.61 USD)

Obviously, as you can see, as we get to 2026-2027 there is some variation in prediction, but we are going with the average.

Now, taking the current price ($22.20) and calculating the forward PE ratios gives us the following results:

2024 (current PE): 105

2025 (forward PE): 43

2026 (forward PE): 24

2027 (forward PE): 15

As we can see the company stock is a bit overpriced at the moment with a PE of 105. However, with its stellar predicted growth the company will generate increasing levels of EPS and its stock price should continue to grow accordingly. At a 50% EPS growth that is predicted and taking into account PEG of 1 that is considered to be fair, the company should maintain PE of 50. With that, we should expect the price to double by end of 2026 and triple by end of 2027.

Now, obviously, this is quite long-term hold. But my analysis and portfolio is long-term and I am content to hold stock for 2 years for it to triple.

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Disclaimer: As usual, trade at your own risk. I own CDLR stock. I do not suggest you should buy any of the stocks I write about. As usual, please do your own due diligence before investing your own money in any of the stocks I write about. The above analysis is quite basic and just gives ideas for further research. A much deeper analysis is required for each stock, including the analysis of operations, debt, etc. I may sell any of the stocks I say I currently own at any moment before it reaches the targets that I set or keep them for even when they reach the target.