RWE: Set Medium-Term Guidance Above Our Expectations, Hiked Dividend, Shares Cheap

We confirm our EUR 55 fair value estimate after no-moat RWE held a capital markets day where it raised its investments, set 2024 guidance in line with the company-compiled consensus and our expectations, and also set 2027 guidance above our expectations. The company set the 2024 per-share dividend at EUR 1.1, 10 % higher than in 2023 and pledged to grow the dividend by 5%-10% per year versus a flat dividend planned in the previous CMD. We commend this although we would have preferred to see a share buyback after two years of outstanding earnings. We reckon that RWE will not need to raise equity to fund its plan. Shares are significantly undervalued.