DAVY VIEW

H1 2025 presented a challenging operating environment for Greencoat UK Wind (UKW) with generation 14% below budget, and this is reflected in our updated 2025-2027 forecasts. Despite this near-term weakness, we believe UKW’s valuation case remains strong. Its modest premium to the sector average price to net asset value (P/NAV) overlooks the superior returns on offer. Adjusting for the current 24% discount, portfolio returns at the current share price are 14.4% – corresponding to an 8.7% premium over the UK risk-free rate. We reiterate our ‘Outperform’ rating with a revised price target of 157p/share (previously 175p).