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RWE AG Class A RWE

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Stock XETR Rating as of
€35.60 +0.65 (1.86%)
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As of Delayed Price Closed
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Company Report

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RWE Earnings: Exceeding Consensus After Yet Another Outstanding Performance by the Trading Business

Tancrede Fulop

We confirm our EUR 48 fair value estimate after no-moat RWE released first-quarter results materially above company-compiled consensus thanks to yet another strong performance of the trading business and good wind conditions. The company conservatively confirmed its 2024 guidance. Shares sold off at the beginning of the year due to falling power prices and generation spreads, which entailed a downward revision of the guidance in January. Power prices have rebounded by 34% from the February lows and are flat year to date. Yet, RWE shares are still down by 15% since the beginning of the year. We believe that continuing strong earnings, a likely upgrade of 2024 guidance, and a pending interest-rate cut by the European Central Bank should drive a rerating of the stock.

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Price vs Fair Value

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RWE is trading at a 215% premium.
Price
€34.95
Fair Value
€33.00
Uncertainty
Medium
1-Star Price
€57.30
5-Star Price
€79.50
Economic Moat
Jmkln
Capital Allocation
Lctfkkqpw

Bulls Say, Bears Say

Bulls

Having shifted its targets from net income to EPS, the group could finally concede to do share buy backs.

Bears

Electricity demand destruction from the accelerated deindustrialization of Europe could herald a long period of depressed power prices and clean spark spreads, similar to 2009-2016.

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Trading Information

Previous Close Price
€34.95
Day Range
€34.66–36.35
52-Week Range
€30.08–42.93
Bid/Ask
€0.00 / €0.00
Market Cap
€26.48 Bil
Volume/Avg
5.1 Mil / 3.0 Mil

Key Statistics

Price/Earnings (Normalized)
15.41
Price/Sales
0.91
Dividend Yield (Trailing)
3.02%
Dividend Yield (Forward)
3.02%
Total Yield
3.01%

Company Profile

Since the deal with E.On, RWE is refocused on power generation, mostly in Europe. It owns 38 gigawatts of power generation capacity: 28% from lignite and hard coal plants, 37% from gas plants, 40% from renewables including pumped storage and batteries. Besides Germany, RWE’s power plants are chiefly located in the United Kingdom, the Netherlands, Turkey, and the United States for many onshore wind farms.
Sector
Utilities
Industry
Utilities - Diversified
Stock Style Box
Large Value
Total Number of Employees
551
Website
https://www.rwe.com

Competitors

Valuation

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Metric
RWE
ENGI
ORSTED
Price/Earnings (Normalized)
 15.412.578.47
Price/Book Value
 0.821.272.93
Price/Sales
 0.910.473.24
Price/Cash Flow
 37.463.2914.76
Price/Earnings
RWE
ENGI
ORSTED

Financial Strength

Metric
RWE
ENGI
ORSTED
Quick Ratio
 0.560.761.02
Current Ratio
 1.560.991.37
Interest Coverage
 3.752.31−3.35
Quick Ratio
RWE
ENGI
ORSTED

Profitability

Metric
RWE
ENGI
ORSTED
Return on Assets (Normalized)
 1.36%2.61%−2.42%
Return on Equity (Normalized)
 4.64%17.34%−10.60%
Return on Invested Capital (Normalized)
 2.60%8.47%−2.73%
Return on Assets
RWE
ENGI
ORSTED
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