RWE AG (RWE) AI Stock Analysis

• Market Cap: €26.05B
• Dividend Yield: 3.14%
• Average Volume (3M): 1.48M
• Price to Earnings (P/E): 10.0
• Beta (1Y): 0.35
• Revenue Growth: -7.36%
• EPS Growth: -25.03%
• Country: DE
• Employees: 20,985
• Sector: Utilities
• Sector Strength: 60
• Industry: Diversified Utilities
• EPS (TTM): 0.91
• Shares Outstanding: 743,841,200
• 10 Day Avg. Volume: 1,284,746
• 30 Day Avg. Volume: 1,481,077
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: €42.80
• Price Target Upside: 22.22% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 12

• Rating: 63 Neutral
• Price Target: €37.00 ▲(5.65% Upside)

RWE AG's overall stock score is primarily influenced by its mixed financial performance and attractive valuation. The company shows profitability but faces challenges in revenue growth and cash flow generation. Technical analysis presents a neutral to slightly bearish outlook, with some indicators suggesting potential downward momentum. However, the low P/E ratio and healthy dividend yield provide a positive valuation perspective, making the stock potentially attractive for value investors.

Positive Factors

Green Transition

RWE is a beneficiary of the green transition movement in Europe and the US.

Renewable Assets

RWE successfully doubled its US renewable assets to more than 7GW, overtaking European peers in terms of renewable exposure in the US.

Share Buyback

A new share buyback program can help support the share price.

Negative Factors

Commodity Prices

Key risks include a significant decline in commodity/power prices and potential windfall tax.

Earnings Decline

Lower earnings from Flexible Generation and supply & trading segments led to a year-on-year decline in earnings.

Power Prices

Soft power prices remain as headwinds, impacting the stock performance.

RWE AG Business Overview & Revenue Model

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.

How the Company Makes Money

RWE generates revenue primarily through the production and sale of electricity and gas. Key revenue streams include the sale of generated electricity from its diverse portfolio of power plants, including renewable energy sources such as wind and solar, as well as traditional sources like coal and natural gas. The company also earns income through energy trading activities, leveraging market fluctuations to optimize profits. Additionally, RWE benefits from long-term power purchase agreements (PPAs) and partnerships with various stakeholders, including governments and private enterprises, which provide stability and predictability in revenue. The ongoing transition to renewable energy further enhances RWE's earning potential by tapping into government incentives and subsidies for clean energy projects.

RWE AG Financial Statement Overview

Summary

RWE AG exhibits a mixed financial performance. The income statement highlights profitability but with declining revenue and net profit margins. The balance sheet shows a stable financial position with moderate leverage, but declining ROE is a concern. The cash flow statement indicates potential liquidity challenges due to negative free cash flow. Overall, while the company maintains profitability, it faces challenges in revenue growth and cash flow generation.

Income Statement

RWE AG's income statement shows mixed performance. The TTM (Trailing-Twelve-Months) data indicates a decline in revenue growth rate of -3.84%, reflecting challenges in maintaining top-line growth. The gross profit margin is relatively healthy at 31.81%, but the net profit margin has decreased to 11.18% from 21.20% in the previous annual report. The EBIT margin is negative, indicating operational challenges, while the EBITDA margin remains strong at 36.07%, suggesting good cash generation capability. Overall, the company shows profitability but faces revenue growth challenges.

Balance Sheet

RWE AG's balance sheet reflects a stable financial position with a debt-to-equity ratio of 0.61, indicating moderate leverage. The return on equity (ROE) has decreased to 7.86% in the TTM period, down from 16.28% in the previous year, suggesting a decline in profitability relative to equity. The equity ratio stands at 33.78%, showing a solid equity base relative to total assets. The company maintains a balanced approach to financing, but the declining ROE is a concern.

Cash Flow

The cash flow statement reveals some concerns for RWE AG. The free cash flow is negative, and the free cash flow to net income ratio is -1.17, indicating that the company is not generating sufficient free cash flow relative to its net income. The operating cash flow to net income ratio is 0.21, showing limited cash flow generation from operations. Although there is a positive free cash flow growth rate of 10.33% in the TTM period, the overall cash flow position suggests potential liquidity challenges.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	23.07B	24.22B	28.57B	38.37B	24.53B	13.69B
Gross Profit	7.34B	8.65B	7.92B	6.69B	6.34B	3.47B
EBITDA	8.32B	10.68B	8.05B	3.83B	4.43B	4.63B
Net Income	2.58B	5.13B	1.45B	2.72B	721.00M	1.05B
Balance Sheet
Total Assets	97.81B	98.44B	106.49B	138.55B	142.31B	61.67B
Cash, Cash Equivalents and Short-Term Investments	9.27B	11.94B	14.64B	20.46B	13.87B	8.99B
Total Debt	20.26B	15.79B	13.67B	15.62B	12.11B	3.35B
Total Liabilities	61.25B	64.82B	73.35B	109.27B	125.31B	43.70B
Stockholders Equity	33.05B	31.55B	31.57B	27.58B	15.25B	17.18B
Cash Flow
Free Cash Flow	-5.86B	-2.76B	-923.00M	-2.08B	3.58B	817.00M
Operating Cash Flow	5.03B	6.62B	4.24B	2.41B	7.27B	4.17B
Investing Cash Flow	-11.26B	-9.71B	-2.81B	-9.89B	-7.74B	-4.35B
Financing Cash Flow	4.13B	1.12B	-1.56B	8.62B	1.46B	1.77B

RWE AG Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 35.02
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DE:RWE, the sentiment is Positive. The current price of 35.02 is above the 20-day moving average (MA) of 34.96, below the 50-day MA of 35.73, and above the 200-day MA of 32.02, indicating a neutral trend. The MACD of -0.36 indicates Positive momentum. The RSI at 48.94 is Neutral, neither overbought nor oversold. The STOCH value of 46.18 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for DE:RWE.

RWE AG Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	66 Neutral	$17.24B	18.03	5.60%	3.64%	6.63%	11.55%
RWE	63 Neutral	€26.05B	10.01	7.90%	3.14%	-7.36%	-25.03%
0MPP	―	€39.63B	12.43	18.90%	―	―	―
0IHQ	―	€21.92B	53.93	3.57%	―	―	―
0FCK	―	€2.00B	12.96	7.01%	―	―	―