E.On Earnings: 2025 Guidance Set a Tad Above Expectations, 2028 Guidance Raised; Shares Cheap

We confirm our EUR 17 fair value estimate after narrow-moat E.On released 2024 results in line with our expectations, set 2025 guidance a tad above FactSet consensus, but below ours and raised its 2028 net guidance, albeit below our expectations. The downside to our forecasts in 2025 and 2028 is driven by investments below our estimates so the hit to the valuation is limited. Besides, E.On could raise its investments should regulation improve for the German grid. We commend this approach. The 2024 dividend is set at EUR 0.55, 4% above 2023 and implying a 4.6% yield. The commitment to grow the dividend annually by up to 5% through 2028 was reiterated. The 2025 P/E of 10.7 reflects the material undervaluation of the shares.