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Scatec (OB:SCATC) After Obelisk Progress And The Growth Story Behind Its Valuation

Simply Wall St · 2d ago

Scatec (OB:SCATC) has begun commercial operations for the second phase of its 1.1 GW Obelisk solar and 100 MW battery project in Egypt, under a 25 year power purchase agreement with EETC.

See our latest analysis for Scatec.

The latest news on the Obelisk project comes after Scatec’s entry into onshore wind in Europe through the Urleasca project in Romania. It also follows a recent period of mixed share price momentum, with a 7 day share price return of 5.34% but a year to date share price decline of 8.53%. Over a 3 year period the total shareholder return has been 26.78%, while the 5 year total shareholder return shows a decline of 44.8%. This indicates that long term investors have experienced both recovery and earlier weakness.

If projects like Obelisk and Urleasca have you thinking more broadly about the energy transition, it could be a useful time to scan 35 power grid technology and infrastructure stocks

After a quick rebound following the Obelisk milestone, yet a weaker performance year to date, the question for Scatec now is whether recent gains already reflect most of the good news or if the valuation still leaves room for more upside.

Most Popular Narrative: 24% Undervalued

Analysts following Scatec see a fair value of NOK129.89 per share, compared with the latest close of NOK98.70, and link that gap to a very ambitious growth path.

The company's rapidly expanding growth portfolio, including a record-high backlog of 3.2 GW, an additional 2 GW under construction, and a pipeline of 7.7 GW of mature projects across multiple technologies and geographies, signals the potential for continued top-line growth and a doubling of installed capacity over the next two years, which would positively impact future revenues.

Read the complete narrative.

Want to see what sits behind that growth story for Scatec? The narrative leans on aggressive revenue expansion, sharply higher margins, and a different earnings profile by the end of the decade.

Result: Fair Value of NOK129.89 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, Scatec’s heavy exposure to emerging market PPAs, along with its reliance on cheaper financing and smooth project execution, could quickly test that growth narrative if conditions shift.

Find out about the key risks to this Scatec narrative.

Next Steps

Given the mix of optimism and concern around Scatec, it makes sense to look at the underlying data yourself and decide quickly where you stand. To weigh both sides of the story in one place, start with these 3 key rewards and 3 important warning signs

Looking for more investment ideas beyond Scatec?

Scatec might have your attention right now, but some of the best portfolio moves come from widening your search before the market catches on.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.