E.ON SE (EOAN.DE) | Investment Case

1. Company Snapshot

1.a. Company Description

E.ON SE operates as an energy company in Germany, the United Kingdom, Sweden, the Netherlands, Belgium, rest of Europe, and internationally.It operates through two segments, Energy Networks and Customer Solutions.The Energy Networks segment operates power and gas distribution networks, as well as provides maintenance, repairs, and related services.

The Customer Solutions segment supplies power, gas, and heat, as well as with products and services that enhance energy efficiency to residential, small and medium-sized enterprises, large commercial and industrial, sales partners, and public entities.In addition, the company operates, generates, and dismantles nuclear power stations in Germany and Turkey.Further, it provides SmartSim, a software solution that allows renewable gases to be fed into gas grids; gas quality tracking solutions; GasPro, a mobile gas sample collector; metering solutions; and GasCalc, a software that calculates natural gases, LNG, and biogases properties.

The company was founded in 1923 and is headquartered in Essen, Germany.

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1.b. Last Insights on EOAN

E.ON SE faces regulatory uncertainties and rising interest costs, despite reporting robust earnings growth and strategic investments. The company's Q3 2025 earnings call highlighted its strong financial performance, but also noted challenges. A recent deal with Nokia to modernize Germany's energy grid may bring efficiencies, but may also entail significant costs. Additionally, the company's digital transformation strategy focuses on sustainable energy solutions, but its implementation may pose challenges. E.ON's navigation of these issues will be crucial. (Source: E.ON SE Q3 2025 Earnings Call Highlights)

1.c. Company Highlights

Last Price	15.42
Change Percentage	-1.06%
Open	15.58
Previous Close	15.59
Market Cap ( Millions)	40294
Volume	3775263
Year High	16.55
Year Low	10.44
M A 50	15.89
M A 200	15.27

FCF Yield	-2.59%
Dividend Yield	3.57%
ROE	18.01%
Debt / Equity	226.81%
Net Debt / EBIDTA	342.84%
Price To Book	2.31
Price Earnings Ratio	12.8
Price To FCF	-38.56
Price To sales	0.49
EV / EBITDA	7.14

2. E.ON's 9-Month Earnings: A Mixed Bag Amid Regulatory Uncertainty

E.ON's financial performance for the first 9 months of the year was marked by a 10% year-over-year increase in adjusted EBITDA to €7.4 billion, driven primarily by the Energy Networks business. Adjusted net income rose 4% to €2.3 billion. However, the company's Retail segment EBITDA declined by 18% due to normalization effects and some shifts between quarters. E.ON's actual EPS came in at €0.142, slightly below estimates of €0.1555. Investments rose 8% year-over-year, reflecting the company's focus on growth. Analysts estimate a revenue decline of 0.7% for next year, indicating a cautious outlook.

Publication Date: Nov -13

                                    📋 Highlights
                                    9-Month Financial Growth:
                                                Adjusted EBITDA reached €7.4 billion (+10% YoY), adjusted net income rose to €2.3 billion (+4% YoY).
Regulatory Revenue Cap Limitation:
                                                German regulator approved 1.4% annual revenue increase for power DSOs, excluding market-driven factors like interest rates.
Debt Factor Target:
                                                E.ON aims for 4.5x economic net debt/EBITDA by 2025, reflecting disciplined capital structure management.
CapEx Flexibility:
                                                €5–10 billion extra CapEx headroom earmarked for international growth, with potential reallocation if German regulatory conditions remain unfavorable.
ROE and Regulatory Critique:
                                                Targets 8%+ ROE, citing flaws in current regulatory methodology on dispatch costs and efficiency benchmarking.

                                

Regulatory Developments and Their Impact

The German regulator announced a 1.4% increase in the revenue cap for power DSOs during the next regulatory period. However, E.ON remains cautious, citing concerns over the cost of debt allowances. The company's CFO, Nadia Jakobi, noted that the 1.4% increase is "only structural, and market-related elements like higher interest rates are not included." This cautious stance is reflected in E.ON's expectation of a debt factor around 4.5x economic net debt to adjusted EBITDA for 2025.

Valuation and Growth Prospects

With a P/E Ratio of 12.75 and an EV/EBITDA of 7.13, E.ON's valuation appears reasonable, considering its growth prospects. The company's ROE stands at 18.01%, indicating a strong return on equity. However, the Net Debt/EBITDA ratio of 3.43 suggests a relatively high level of indebtedness. E.ON aims for an 8% plus ROE and is critical of the current regulatory methodology. The company's guidance for 2026 will be provided at its full-year results in 2025, and it may update its CapEx plan if there is more clarity on investment conditions.

Investment Strategy and Outlook

E.ON is pursuing a value-over-volume strategy, targeting 47 million customers in its energy retail business by 2025, with a target range of EUR 1.6 billion to EUR 1.8 billion EBITDA. The company has EUR 5 billion to EUR 10 billion extra CapEx headroom earmarked for organic growth, with a focus on international and European businesses. Nadia Jakobi confirmed that this headroom could be redirected to other markets if the German regulator doesn't provide the required package.

3. NewsRoom

German Energy Giant Warns Against Wind and Solar Subsidies

Dec -01

Source:

With 43% institutional ownership, E.ON SE (ETR:EOAN) is a favorite amongst the big guns

Nov -21

Source:

Energy & Utilities Roundup: Market Talk

Nov -12

Source:

Energy & Utilities Roundup: Market Talk

Nov -12

Source:

E.ON SE (ENAKF) Q3 2025 Earnings Call Highlights: Strong Financial Performance Amid Regulatory ...

Nov -12

Source:

Energy & Utilities Roundup: Market Talk

Nov -12

Source:

FPT and E.ON Extend Partnership to Drive AI-Powered Energy Management Innovation

Nov -11

Source:

Should You Think About Buying E.ON SE (ETR:EOAN) Now?

Nov -07

Source:

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.81%)

6. Segments

Energy Retail - Other

Expected Growth: 4.5%

E.ON SE's Energy Retail - Other segment driven by increasing demand for energy sales and related services outside of Germany and the UK, fueled by growing electrification of transportation and industry, as well as rising energy efficiency standards.

Energy Retail - Germany

Expected Growth: 4.8%

E.ON SE's growth is driven by increasing demand for clean energy, government incentives, and strategic investments in renewable energy sources, such as wind and solar power, which are expected to fuel the company's expansion in the European energy market.

Energy Networks - Germany

Expected Growth: 4.5%

E.ON SE's energy networks in Germany operate and maintain power grids and distribution systems, providing reliable energy supply to households and businesses, driven by increasing demand for electricity, infrastructure upgrades and replacement, and government initiatives to promote renewable energy sources.

Energy Retail - United Kingdom

Expected Growth: 5.6%

E.ON SE's growth is driven by the UK's increasing demand for renewable energy, government incentives for energy efficiency, and the company's strategic investments in digital technologies to enhance customer experience.

Energy Retail - The Netherlands

Expected Growth: 3.5%

Growing demand for renewable energy and increasing competition in the Dutch energy market drive E.ON's energy retail services segment growth, supported by the company's strong brand presence and expanding customer base.

Energy Networks - South Eastern Europe

Expected Growth: 4.5%

E.ON SE's Energy Networks segment is expected to grow driven by increasing electricity and gas demand in South Eastern Europe, fueled by economic growth and urbanization, as well as the need for grid modernization and expansion to ensure reliable energy supply.

Energy Networks - Central Eastern Europe

Expected Growth: 4.5%

Growing demand for electricity and gas in Central Eastern Europe, driven by increasing urbanization and industrialization, will drive Eön’s Energy Networks segment growth.

Energy Infrastructure Solutions

Expected Growth: 4.1%

E.ON SE's growth is driven by increasing demand for renewable energy sources, expansion into emerging markets, and strategic acquisitions. The company's focus on clean energy and digitalization also contributes to its growth.

Corporate Functions/Other

Expected Growth: 5.4%

E.ON SE's miscellaneous corporate functions not classified elsewhere are expected to grow, mainly driven by the company's focus on digitalization, operational efficiency and cost savings initiatives, as well as its strategic partnerships and investments in renewable energy.

Consolidation

Expected Growth: 4.5%

E.ON SE's Consolidation segment is expected to grow driven by efficient management of the E.ON group, increased focus on renewables, and cost savings from streamlining operations.

Energy Networks - Nordics

Expected Growth: 4.5%

E.ON SE's Energy Networks segment is driven by growing demand for electricity and gas in Sweden, Norway, and Denmark, where the segment operates electricity and gas distribution networks, further supported by increasing adoption of renewable energy sources.

7. Detailed Products

Renewable Energy

E.ON SE offers renewable energy solutions, including wind, solar, and hydroelectric power, to reduce carbon footprint and promote sustainable living.

Energy Trading

E.ON SE provides energy trading services, enabling customers to buy and sell energy commodities, such as electricity, gas, and CO2 certificates.

Smart Grids

E.ON SE offers smart grid solutions, including advanced metering infrastructure, grid management systems, and energy storage solutions.

Energy Efficiency

E.ON SE provides energy efficiency solutions, including energy audits, energy management systems, and energy-saving technologies.

Electric Vehicle Charging

E.ON SE offers electric vehicle charging solutions, including charging stations, charging management systems, and e-mobility services.

Energy Storage

E.ON SE provides energy storage solutions, including battery storage systems, energy management systems, and grid-scale energy storage.

8. E.ON SE's Porter Forces

Forces Ranking

Threat Of Substitutes

E.ON SE operates in the energy industry, where substitutes are limited. However, the increasing adoption of renewable energy sources and energy-efficient technologies poses a moderate threat to the company's operations.

Bargaining Power Of Customers

E.ON SE's customers have limited bargaining power due to the company's diversified customer base and lack of dependence on a single customer segment.

Bargaining Power Of Suppliers

E.ON SE's suppliers have moderate bargaining power due to the company's dependence on a few large suppliers for fuel and equipment. However, the company's scale and diversification mitigate this risk.

Threat Of New Entrants

The energy industry has high barriers to entry, including significant capital requirements and regulatory hurdles, making it difficult for new entrants to challenge E.ON SE's market position.

Intensity Of Rivalry

The energy industry is highly competitive, with many established players competing for market share. E.ON SE faces intense rivalry from companies such as RWE, EnBW, and Vattenfall, which can lead to pricing pressures and reduced market share.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	70.00%
Debt Cost	3.95%
Equity Weight	30.00%
Equity Cost	7.12%
WACC	4.90%
Leverage	233.36%

11. Quality Control: E.ON SE passed 0 out of 9 key points

Strong Liquidity

Low Deb

Strong Interest Coverage

Healthy Cash Flow

Operating Inefficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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 ->

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 ->

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 ->

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 ->

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 ->

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 ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

29.37%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

4.90%

E.ON SE - DE000ENAG999

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on EOAN

1.c. Company Highlights

Lower Quality

Less Volatile

Strong Momentum

Earnings Beats

Revenues Beats

Average Yield

Revenues Miss

Stable Momentum

Earnings Miss

Average Quality

Fairly Valued

Medium Volatility

Average Growth

Cheaper

Better Quality

2. E.ON's 9-Month Earnings: A Mixed Bag Amid Regulatory Uncertainty

Regulatory Developments and Their Impact

Valuation and Growth Prospects

Investment Strategy and Outlook

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.81%)

6. Segments

Energy Retail - Other

Expected Growth: 4.5%

Energy Retail - Germany

Expected Growth: 4.8%

Energy Networks - Germany

Expected Growth: 4.5%

Energy Retail - United Kingdom

Expected Growth: 5.6%

Energy Retail - The Netherlands

Expected Growth: 3.5%

Energy Networks - South Eastern Europe

Expected Growth: 4.5%

Energy Networks - Central Eastern Europe

Expected Growth: 4.5%

Energy Infrastructure Solutions

Expected Growth: 4.1%

Corporate Functions/Other

Expected Growth: 5.4%

Consolidation

Expected Growth: 4.5%

Energy Networks - Nordics

Expected Growth: 4.5%

7. Detailed Products

Renewable Energy

Energy Trading

Smart Grids

Energy Efficiency

Electric Vehicle Charging

Energy Storage

8. E.ON SE's Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: E.ON SE passed 0 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

12.e Scoring ^Insights

12.f DCF ^BETA