RWE: Unlikely Recovery In 2025E, But Upside Exists 2027E

2025-02-02 09:49:01 ET

Summary

• RWE's share price decline to below €30/share presents a significant upside, aligning it with other European and US utilities, bolstered by strong fundamentals and a strategic shift towards renewables.
• The company's diversification into renewables, including a major presence in the US, and its planned exit from coal by 2030, highlight its evolving energy mix.
• Despite near-term challenges and political risks, RWE's share buybacks and diversified portfolio, including CCGTs and hydrogen, position it well for long-term growth.
• By 2030, RWE aims to operate a 65 GW portfolio with a balanced Europe/US split, targeting competitive returns and leveraging a strong asset mix.

Dear readers/followers,

In this article, I'll take a deeper look at RWE (RWEOY)(RWNEF)(RWNFF) after about three months since my last piece ( please find that last piece here ), from which the company has seen a further decline to around a native share price of below €30/share for the native ticker. This marks, I believe, a significant upside for the company on a forward basis and puts RWE, at this price, on par with other utilities in Europe, and some in the US. What I like about RWE is the company's fundamentals and the outlook in the core European market. Also, the company is well into its multi-year program of changes and improvements.

Ever since the M&A of ConEdison's Clean Energy and its move into becoming a major player in renewables and solar, including one of the larger ones in the US, the company has been on my radar for reasons of diversification while maintaining a European core....

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