Thanks for the good discussion. Somehow I feel that in the case of Fortum, there’s too little talk about long-term return expectations anyway (±10 years).
I have a very simple strategy (if you can call it that) regarding Fortum: growth in electricity demand. In addition to data centers, if hydrogen production starts to break through (e.g., SSAB gets hydrogen reduction in Finland), electricity consumption will rise enormously.
I don’t have the capacity for deeper reflection, so I gladly read thoughts like these.
Amazon needs 2 Gigawatts of electricity for its data centers to run in Pennsylvania. Since there aren’t really any proper AI companies on the Finnish stock exchange, at least among the big ones, it’s not a completely far-fetched idea that Fortum could be among the beneficiaries.
A bit more casual observation, but I just wonder how many more years analysts will manage to be wrong about Fortum? It always exceeds with results and dividends, but analysts just keep dragging the forecasts into the mud. A suppressed chuckle here.
Ville Valkonen (National Coalition Party) announced on June 16 on the messaging service X that the Parliament’s Audit Committee will start a long-awaited investigation into the Uniper case.
Whether this investigation still truly matters from an investor’s perspective at this stage – I cannot say. But let’s put this here on the forum as a tidbit of information.
Mwah. That report will certainly be given a good whitewashing… The outcome will surely be that Tytti Tuppurainen and her aides were the one and only right people to negotiate the terms, when facing half a squad of corporate-grade lawyers
Forecasts and, consequently, target prices probably stem from futures prices, which have shown falling electricity prices that will remain permanently low. At the same time, Fingrid predicts a doubling of electricity consumption around 2030, while new onshore wind power projects are on hold, and no new nuclear or offshore wind power is in sight. Relative to this, the forecasts have been very pessimistic. This is a long-term situation.
Currently, earnings beats seem to have come mainly from better-than-expected hedging and optimization premiums, which are difficult to anticipate. It can therefore be assumed that this is short-term noise, from which it cannot necessarily be concluded that analysts have been “wrong”. It is also worth remembering that Fortum has not changed structurally in any significant way during this and last year, so the current good share price development may be mainly positive overreaction.
I have repeatedly considered selling my Fortum shares – especially due to @Pappa_Tunturi’s recent moves. As a novice “value investor,” I have tried to determine what the company’s true fair value might be.
Based on my SOTP analysis, Fortum still has hidden value that the market price does not currently fully reflect (currently 16 euros) – especially the valuation of hydropower assets has been difficult, but in light of the results, it is very crucial.
Of course, it’s good to be aware for the overall picture that earnings forecasts are low along with electricity prices.
I would like to hear if others of you have considered Fortum as a kind of “real estate investment” with undervalued real assets?
Fortum therefore has a number of pumped-hydro power plants on the drawing board, which would utilize electricity price fluctuations. This is probably an investment of at least hundreds of millions of euros in total. Furthermore, Kemijoki Oy (of whose hydropower shares Fortum owns over 60%) is planning the construction of pumped-hydro power plants. 3 new Fortum pumped-hydro power plants are being planned in Sweden, which has drawn criticism that citizens are not being listened to, etc.:
Fortum’s response was published today, and its main message was that the plans are still in their early stages, hearings have taken place and will continue, and that pumped-hydro power plants balance energy production.
While waiting for Fortum’s Q2/2025 report, you can check this out. If the recommendations for Fortum’s stock in that analysis were to be summarized in one word, it would be HOLD.
Anders Oldenburg took a strong stance on the Finnish State as a business partner.
“The Finnish state handled the problem in what I consider a very ugly and unethical way. The state granted Fortum an ‘emergency loan’ – which the company said it didn’t even need – in exchange for a one percent ownership stake in the company for free. I don’t want business partners for Phoebus who enrich themselves at the expense of other owners.”
Statkraft’s result significantly weakened from last year, even though the company produced a record amount of electricity. The reason is the decrease in electricity prices in the Nordic markets. Cost-cutting measures are expected, as well as the sale of non-core assets and the reduction of investment plans. For example, Statkraft has decided to divest from green hydrogen projects. The Norwegians intend to focus on their core businesses in the future, especially their hydropower. It will be interesting to see how this correlates with Fortum’s results.
Vattenfall’s results seem to have been released a few days ago. It doesn’t seem to have been posted on the forum yet. This peer’s profitability also declined due to the downward trend in electricity prices, but hedging, successful trading, and distribution operations helped to improve the figures.
"Fortum has signed an agreement to acquire a development portfolio of renewable energy projects from German ABO Energy, a company specializing in renewable energy development projects and construction. The acquisition supports Fortum’s goal to prepare for future growth by developing ready-to-build renewable energy projects in the Nordics. The acquisition covers approximately 4.4 GW of onshore wind power development projects in various stages, located in Finland.
The debt-free purchase price is approximately 40 million euros and will be paid upon the closing of the transaction, estimated for the fourth quarter of 2025. The completion of the transaction is subject to the fulfillment of customary conditions. The acquisition also includes the possibility for project-specific additional purchase prices (earn-out), which will be paid if the projects proceed to an investment decision. The estimated total purchase price, including future project-specific additional purchase prices, is approximately 70 million euros. Currently, there are no investment commitments, and the first projects could reach ready-to-build status within a year.
One of Fortum’s strategic targets is to develop a portfolio of over 800 MW of ready-to-build onshore wind and solar power projects by the end of 2026. After the acquisition, Fortum will have approximately 8 GW of solar and onshore wind power projects under permitting in the Nordics, with additional projects in early development stages. Each investment decision depends on the electricity market situation and particularly on the development of industrial electricity demand."
Fortum’s valuation is a complex matter; for example, A. Oldenburg wrote in the latest Seligson quarterly publication: ‘Fortum’s market value 14.5 bn, net debt 1.3 bn, gross value is 15.6 bn. In a normal year, it produces 21 TWh of hydropower, which is easy to value, as entire hydropower plants have been sold in recent years for 700-800 euros / MWh produced. The value of hydropower alone is thus 15-17 bn euros.’
