Citi Research has downgraded Nordex SE (ETR:NDXG) to "neutral" from a previous rating, citing valuation concerns despite strong earnings growth potential. The German wind turbine manufacturer's shares fell over 4% Tuesday following the downgrade, which comes after a significant 158% rally in 2025 and an additional 12% gain year-to-date.

Nordex has benefited from robust order momentum, with orders exceeding 10 GW in 2025, according to Citi Research. The brokerage expects the company to announce updated financial targets at its FY25 results, including a new mid-term EBITDA margin target of approximately 10%, up from the previous 8% target. Citi also anticipates Nordex will announce its first-ever dividend.

Despite Citi's bullish earnings projections, which exceed market consensus with a 2027 earnings per share estimate 26% above consensus forecasts, the firm cited valuation as the primary concern. Based on Citi's forecasts, Nordex shares currently trade at approximately 15x 2027 price-to-earnings ratio and approximately 8x enterprise value-to-EBITDA on what the firm described as a "much higher earnings base