Download PDF

1. Company Snapshot

1.a. Company Description

RWE Aktiengesellschaft generates and supplies electricity from renewable and conventional sources primarily in Europe and the United States.It operates through five segments: Offshore Wind; Onshore Wind/Solar; Hydro/Biomass/Gas; Supply & Trading; and Coal/Nuclear.The company generates wind, solar, hydro, nuclear, gas, and biomass electricity.


It also trades in energy commodities; and operates gas storage facilities, as well as battery storage activities.The company serves commercial, industrial, and corporate customers.RWE Aktiengesellschaft was founded in 1898 and is headquartered in Essen, Germany.

Show Full description

1.b. Last Insights on RWE

RWE's recent performance was driven by strong Q3 earnings, exceeding expectations, and significant investments in renewable energy projects. The company's sale of a UK data centre project for €225 million boosted profit forecasts. RWE's expansion into new European markets and robust funding partnerships, including a €3.2 billion investment from Apollo Global Management, have sparked renewed optimism. Additionally, the company's strong construction pipeline and strategic partnerships are expected to drive growth. Berenberg has a 'Buy' rating on RWE, citing earnings growth prospects.

1.c. Company Highlights

2. RWE's Earnings Report: A Strong 9-Month Performance

RWE reported a robust financial performance for the first 9 months of the year, with adjusted EBITDA reaching €3.5 billion, driven by strong contributions from Offshore Wind, Onshore wind and solar, and Flexible Generation, which stood at €915 million, €1.2 billion, and €1.1 billion, respectively. Adjusted net income was €1.3 billion, resulting in an adjusted earnings per share of €1.76. The actual EPS came out at €1.18, significantly higher than the estimated €0.2532. The company's build-out program is progressing well, with 11.4 gigawatts under construction, and over 2 gigawatts scheduled to start operation by the end of the year.

Publication Date: Nov -13

📋 Highlights
  • Progress on 2025 EPS Target:: Achieved over 80% of full-year 2025 adjusted EPS target in first 9 months.
  • Data Center Sale Gain:: Book gain of €225 million from UK data center development project sale.
  • Build-Out Program Momentum:: 11.4 GW under construction, with 2 GW expected to start by year-end.
  • Amprion Stake Boost:: €3.2 billion added to RWE’s 25.1% stake in Amprion via Apollo Global Management partnership.
  • Strong Adjusted EBITDA:: €3.5 billion total, with offshore wind contributing €915 million and onshore wind/solar at €1.2 billion.

Operational Highlights

RWE's operational performance was marked by significant milestones, including the conclusion of the sale of a data center development project in the UK, generating a book gain of €225 million. The company also secured a long-term partnership with Apollo Global Management, contributing €3.2 billion to RWE's 25.1% stake in Amprion. As noted by CFO Michael Müller, the company is seeing opportunities in data center development, with 10 projects across Europe, and varying approaches to partnerships and contracts.

Guidance and Outlook

RWE confirmed its dividend target of €1.2 for fiscal year 2025 and expects adjusted EBITDA to be between €4.55 billion and €5.15 billion, with adjusted net income ranging from €1.3 billion to €1.8 billion. Analysts estimate next year's revenue growth at 6.1%. The company's guidance for 2025 remains unchanged, although it feels comfortable with its current guidance, citing dependence on weather conditions in Q4.

Valuation Metrics

With a P/E Ratio of 13.11, P/B Ratio of 1.02, and EV/EBITDA of 6.15, RWE's valuation appears reasonable. The Dividend Yield stands at 2.37%, providing a relatively stable return for investors. The Net Debt / EBITDA ratio is 2.03, indicating a manageable debt burden. The ROE is 7.86%, suggesting a decent return on equity. These metrics suggest that RWE's stock is fairly valued, with potential for growth driven by its strong operational performance and favorable outlook.

Growth Drivers

RWE is well-positioned to benefit from the growing demand for renewable energy and data center development. The company's merchant offshore portfolio is seeing increased demand, which is helping in marketing assets on a long-term basis. Amprion's performance is better than expected, driven by optimizing grid build-out and regulatory returns. The growth in power demand driven by data centers is expected to have a positive impact on FlexGen's earnings, with a stable income basis due to the need for firm and flexible capacity.

3. NewsRoom

Card image cap

Flatiron Energy Accelerates Growth Plan With Hiring Chief Development Officer

Dec -04

Source:

Card image cap

RWE and TotalEnergies to collaborate with ARC marine on OranjeWind wind farm

Dec -04

Source:

Card image cap

AI Is Powering Utility Stocks Beyond the U.S. 3 Ideas to Play the Trend.

Dec -03

Source:

Card image cap

RWE to build its largest UK battery energy storage facility

Dec -01

Source:

Card image cap

RWE (XTRA:RWE): Exploring Valuation After a Strong 48% Rally in 2024

Nov -29

Source:

Card image cap

RWE brings more American-generated power to Texas with Stoneridge project

Nov -26

Source:

Card image cap

Netherlands Power Industry Outlook Report 2025-2035: Market Trends, Regulations, and Competitive Landscape Featuring RWE, Vattenfall, Engie, Energeticky a Prumyslovy, Mitsubishi, Uniper

Nov -25

Source:

Card image cap

Daniel Snyder, PhD Joins Propel Health Medical Affairs

Nov -24

Source:

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (6.24%)

6. Segments

Supply & Trading

Expected Growth: 5.2%

RWE Supply & Trading’s strong position in global energy markets, driven by increasing demand for clean energy and decarbonization, is expected to drive growth.

Flexible Generation

Expected Growth: 4.5%

RWE AG's Flexible Generation segment benefits from increasing demand for flexible power supply, driven by the integration of intermittent renewables, and growing need for grid stability and ancillary services.

Phaseout Technologies

Expected Growth: 2.3%

Decarbonization efforts and increasing regulatory pressure drive RWE AG's Phaseout Technologies segment, focusing on coal-fired power generation and lignite mining activities, to transition towards cleaner energy solutions.

Onshore Wind/Solar

Expected Growth: 7.2%

Increasing demand for renewable energy, declining costs of onshore wind and solar power generation, and RWE AG's strategic expansion in onshore wind and solar segments drive growth.

Offshore Wind

Expected Growth: 10.3%

Government initiatives and declining costs drive growth in offshore wind energy security and reducing carbon emissions are key fundamental drivers

Consolidation

Expected Growth: 5.3%

RWE AG's consolidation segment benefits from increasing scale and cost savings, as well as growth in RWE's renewable energy portfolio, driving segment growth.

Other, consolidation

Expected Growth: 3.5%

RWE AG’s Other consolidation segment is driven by growth in smaller businesses, leveraging diversified revenue streams and increasing operational efficiency.

7. Detailed Products

Renewable Energy

RWE Aktiengesellschaft generates renewable energy through wind, solar, hydro, and biomass power plants, providing clean energy to households and businesses.

Conventional Power Generation

RWE operates conventional power plants that generate electricity from fossil fuels, ensuring a stable energy supply to meet demand.

Energy Trading

RWE's energy trading business buys and sells energy commodities, managing risk and optimizing energy portfolios for customers.

Grid and Infrastructure

RWE operates and maintains a vast network of power grids, transmission lines, and distribution systems, ensuring reliable energy transmission and distribution.

Energy Services

RWE offers a range of energy services, including energy efficiency solutions, energy management, and consulting services.

8. RWE Aktiengesellschaft's Porter Forces

Forces Ranking

Threat Of Substitutes

RWE Aktiengesellschaft operates in the energy sector, which has a moderate threat of substitutes. While there are alternative energy sources, the company's diversified portfolio and strong market presence mitigate the threat.

Bargaining Power Of Customers

RWE Aktiengesellschaft has a large customer base, but the bargaining power of customers is limited due to the company's strong market position and diversified product offerings.

Bargaining Power Of Suppliers

RWE Aktiengesellschaft has a moderate bargaining power of suppliers, as it relies on a diverse range of suppliers for its operations. However, the company's size and market presence give it some negotiating power.

Threat Of New Entrants

The energy sector has high barriers to entry, and RWE Aktiengesellschaft's established market position and strong brand make it difficult for new entrants to gain a foothold.

Intensity Of Rivalry

The energy sector is highly competitive, and RWE Aktiengesellschaft faces intense rivalry from other established players. The company must continually innovate and adapt to maintain its market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 27.32%
Debt Cost 7.15%
Equity Weight 72.68%
Equity Cost 7.15%
WACC 7.15%
Leverage 37.58%

11. Quality Control: RWE Aktiengesellschaft passed 1 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
ENGIE

A-Score: 7.2/10

Value: 7.0

Growth: 5.6

Quality: 3.6

Yield: 10.0

Momentum: 7.0

Volatility: 10.0

1-Year Total Return ->

View Full Report
Stock-Card
Enel

A-Score: 6.6/10

Value: 5.4

Growth: 5.1

Quality: 4.8

Yield: 8.1

Momentum: 6.5

Volatility: 10.0

1-Year Total Return ->

View Full Report
Stock-Card
E.ON

A-Score: 6.6/10

Value: 7.3

Growth: 4.8

Quality: 3.2

Yield: 6.9

Momentum: 8.0

Volatility: 9.3

1-Year Total Return ->

View Full Report
Stock-Card
RWE

A-Score: 6.6/10

Value: 8.1

Growth: 5.4

Quality: 3.8

Yield: 5.0

Momentum: 8.0

Volatility: 9.0

1-Year Total Return ->

View Full Report
Stock-Card
Iberdrola

A-Score: 6.2/10

Value: 3.7

Growth: 5.4

Quality: 4.6

Yield: 6.2

Momentum: 7.0

Volatility: 10.0

1-Year Total Return ->

View Full Report
Stock-Card
SSE

A-Score: 5.8/10

Value: 5.9

Growth: 4.9

Quality: 4.5

Yield: 6.9

Momentum: 3.5

Volatility: 9.3

1-Year Total Return ->

View Full Report

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

43.06$

Current Price

43.06$

Potential

-0.00%

Expected Cash-Flows