Empire Offshore Wind has been directed by the U.S. government to suspend its offshore construction activities for the Empire Wind project, located on the outer continental shelf. This decision follows a halt work order received from the Bureau of Ocean Energy Management (BOEM) on April 16. The pause will remain in effect until BOEM completes a comprehensive review.
The project, which secured its federal lease in 2017, is currently in the construction phase and has all requisite federal and state permits. Developed under a contract with the New York State Energy Research and Development Authority, Empire Wind 1 aims to supply electricity to 500,000 homes in New York and has already employed over 1,500 workers across the U.S.
Equinor (EQNR, Financial), which holds ownership through Equinor Wind US, is actively engaging with authorities to resolve the issue and is contemplating legal options, including appealing the order. The company has taken immediate measures to halt marine activities, ensuring utmost safety for workers and environmental protection.
As of March 31, Empire Wind's gross book value was approximately $2.5 billion, incorporating the South Brooklyn Marine Terminal, with around $1.5 billion drawn from the project finance term loan facility. Equinor US Holdings has guaranteed the equity commitment under the project financing, and in the event of a complete stop, repayment of the $1.5 billion to project finance lenders will be required, along with potential termination fees to suppliers.
The financial implications of this halt are under assessment and will be highlighted as a subsequent event in Equinor's first quarter 2025 report.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 4 analysts, the average target price for Equinor ASA (EQNR, Financial) is $27.06 with a high estimate of $31.34 and a low estimate of $22.00. The average target implies an upside of 16.56% from the current price of $23.22. More detailed estimate data can be found on the Equinor ASA (EQNR) Forecast page.
Based on the consensus recommendation from 4 brokerage firms, Equinor ASA's (EQNR, Financial) average brokerage recommendation is currently 2.0, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Equinor ASA (EQNR, Financial) in one year is $24.25, suggesting a upside of 4.46% from the current price of $23.215. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Equinor ASA (EQNR) Summary page.
