Fortum's Hold Rating Kept as Berenberg Notes Power Purchase Deal with Google; Price Target Up

06:27 AM EDT, 09/30/2026 (MT Newswires) -- Berenberg retained its hold rating on Fortum (FORTUM.HE), noting "reasons for optimism and caution," following the Finnish energy company's 22-year power purchase agreement with Alphabet's (ABEA.F) Google. "The PPA 1) underpins the life extension of Fortum's Loviisa plant; 2) opens the prospect of future developments in partnership with Google; 3) enhances Fortum's earnings visibility; and 4) confirms the attraction of Nordic power markets for data centre developers, supporting the long-term power growth anticipated by the region's transmission system operators (TSOs). The embedded power price premium implied by Fortum's guided return on net assets (RONA) uplift is also a bullish signal, especially if similar PPAs follow," according to a Wednesday research report. The research firm added that the 1.4% return on net assets boost that Fortum expects from the deal translates to additional EBITDA of between 130 million euros and 140 million euros, while implying a premium of 30 euros to 35 euros per megawatt-hour over the company's undisclosed long-term power price expectations. On the caution side, Berenberg flagged the deal's impact on the broader market, including on the supply-demand balance, supply security and future power prices, with the latter potentially triggering government intervention. Against this backdrop, Berenberg raised its EPS forecasts for 2027 to 2030 by an average of 25% to incorporate the deal and a "buoyant front end" of the Nordic power prices curve. The price target was also increased to 23 euros from 19 euros.