Norwegian bank DNB believes that energy group Ørsted can improve its capital structure enough to maintain its credit rating of ’BBB+’ without having to raise new capital.

”Our starting point is that Ørsted has other levers to pull than raising equity to increase liquidity sufficiently to maintain its credit rating. These include farm-downs, asset sales, a lower and more realistic growth trajectory and potentially lower dividends,” DNB’s analysts write about the Danish utility group.

Nevertheless, Ørsted’s recommendation is lowered to ’hold’ from ’buy’ and the price target is maintained at DKK 325, which is slightly below the current share price of DKK 339.50 after a gain of 1.2% on Wednesday.

Credit rating agencies Fitch and S&P both put Ørsted on the watch list at risk of being downgraded, following the Danish company’s announcement of huge impairment charges of DKK 28.4bn (USD 4.1bn) in the third quarter and potential provisions of DKK 8-11bn.

DNB expects Ørsted’s updated strategy, to be presented at the latest in connection with the fourth-quarter results, will likely have ”lower and more realistic growth ambitions” and trigger a sigh of relief from investors.

”This, together with potential reversals, falling interest rates and rising tariffs, will be positive in the short term, but we are concerned about the long-term profitability of offshore wind unless costs come down,” DNB writes in the analysis.