RWE Earnings: Medium-Term Targets Are Confirmed; Shares Materially Undervalued

We confirm our fair value estimate of EUR 55 after no-moat RWE released final 2023 results. In late January, it released preliminary 2023 results and said that it expected to reach the lower end of its 2024 guidance due to the fall in wholesale power prices and generation spreads since the guidance was set in November 2023. In the March 14 publication, the group confirmed its 2027 and 2030 targets and said it was committed to the bottom of them, which is roughly in line with estimates. Shares have sold off excessively as the market overestimates the group’s exposure to power prices, in our view.