RWE: Won an Offshore Wind Project at Latest New York Auctions; Shares Materially Undervalued

RWE and National Grid's joint-venture, Community Ocean Wind (73% owned by the former), was awarded a 1.3 gigawatt offshore wind project at the latest New York auctions. We reckon that the project's returns are above our estimates for offshore wind farms to be commissioned beyond 2030. However, Orsted's woes have shown that execution risk is high in the U.S. All in all, we confirm our fair value estimates of EUR 55 and GBX 1,040 for RWE and National Grid, respectively. The former is materially undervalued.