Turbine and grid demand supports substantial profit growth, but customer deposits flatter cash generation. Our forecast still delivers strong margin expansion; sustaining the current share price requires either faster improvement or a richer valuation.
Key points
- 21% in 2028 is the profit margin today's price requires at our chosen multiple.
- $13.7 billion in first-half 2026 came from customer advances, not completed deliveries.
- $869.62 a share is our October 2027 target, supporting a sell initiation.
The call
The market is too optimistic about how quickly orders become profits. At our valuation multiple, today's price requires roughly $11.7 billion of adjusted EBITDA in 2028, meaning profit before interest, taxes, depreciation and selected adjustments. Customer funding helps expansion, but deposits carry future delivery obligations.
Customer advances dominate operating cash flow ($ billions)- H1 2025 reported
- H1 2026 reported
SEC second-quarter 10-Q, July 22, 2026; cash-flow contributions, first six months.
I expect strong growth, not that much profitability. My 2028 revenue forecast is $56 billion. Power contributes $28 billion and grid equipment $20 billion; Wind contributes the balance. Higher-priced turbines support improvement, but equipment deliveries precede the richer service income, while construction capacity and pipelines constrain reservation conversion.
Valuation
| October 2027 valuation input | Our estimate |
|---|
| Full-year 2028 revenue | $56 billion |
| Full-year 2028 adjusted EBITDA | $10.16 billion |
| Business value / 2028 adjusted EBITDA | 22 times |
| Forecast net cash less minority ownership | $7.8 billion |
| Forecast October 2027 shares | 266 million |
| Twelve-month target | $869.62 a share |
My 2028 segment profit margins are 22% for Power and 23% for grid equipment, with Wind breaking even and $600 million of corporate costs. The multiple rewards scarce equipment and recurring services, but allows for elevated interest rates and eventual industry capacity expansion. The margin scenarios below show why this is a sell, not a strong sell: better execution can sustain today's price.
The margin needed to sustain today's share priceOur October 8, 2026 scenarios: 2028 revenue $56 billion; 22 times adjusted EBITDA; fixed equity bridge.
Risks
- Turbine pricing converts into earnings faster than expected; watch delivered equipment margins rather than reservation totals.
- Grid factories expand output faster without sacrificing quality; watch organic revenue growth and warranty costs.
- Wind improves sharply following the litigation settlement; watch project charges and sustained segment profitability, since settlement terms remain undisclosed.
What would change my mind
I would reconsider if disclosures before October 2027 establish a credible path to at least $11.7 billion of 2028 adjusted EBITDA without relying on further customer advances.