Orsted has spent the past year absorbing body blows from politics, rising costs, and investor skepticism. Now the narrative is shifting. Easing US policy risk and a renewed European focus on energy independence are helping the stock rebound, with investors starting to price in a more stable outlook.
Shares in Orsted jumped more than 7% after Bank of America upgraded the stock to buy, saying the balance of risk and reward had turned positive. The rally adds to a strong run this year, with the stock now up more than 25% in 2026. The main driver is a change in how investors view US political risk. Last year, the Trump administration took a hard line on offshore wind, halting several projects including Orsted’s Revolution Wind and Sunrise Wind developments on the East Coast, raising fears that policy intervention could derail the company’s US pipeline entirely.
That risk is now easing. The administration chose not to appeal a court ruling allowing construction to restart at the Revolution site off Rhode Island, which has already begun supplying electricity to New England. A deadline for appealing a similar ruling on the Sunrise project in New York is approaching, and analysts expect no action. Together the two projects account for around 15% of Orsted’s expected EBITDA, so greater certainty around their completion meaningfully improves the earnings picture. The US government recently agreed to pay TotalEnergies about $1 billion to exit its offshore wind plans, which analysts read as implicit acknowledgment that contracts can’t be canceled without compensation, a meaningful guardrail for the sector.
Fundamentals are also improving on their own. Orsted has several offshore wind farms under construction expected to come online in the coming years, and as those projects start generating power they should support stronger free cash flow. Bank of America raised its price target more than 16% and flagged an improved balance sheet, giving Orsted more flexibility to pursue future auctions and growth. Outside the US, the war in the Middle East has pushed oil prices higher and sharpened concerns about energy supply, reinforcing European support for domestic renewables.
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Orsted’s rebound is a clean case study in how fast sentiment can turn in policy-driven sectors. Offshore wind spent the past two years eating it: higher interest rates drove up financing costs, supply chain issues inflated construction budgets, and political opposition cast a shadow over whether projects would survive long enough to generate returns. Orsted absorbed all of that at once, recording large writedowns, canceling projects, and watching its share price crater as investors questioned whether the economics of the whole sector still made sense.
