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RWE AG (RWEOY)
OTHER OTC:RWEOY
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RWE AG
(OTC:RWEOY)
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Rating:67Neutral
Price Target:
$71.00
▲(9.47% Upside)
Action:ReiteratedDate:03/15/26
The score is driven primarily by mixed financial performance: stable leverage and decent profitability are outweighed by multi-year revenue contraction and persistently negative free cash flow. Technicals are supportive with a clear uptrend, valuation is favorable on a low P/E, and the latest earnings call was broadly constructive with reaffirmed guidance and funding support, tempered by wind/resource and U.K. auction headwinds.
Positive Factors
Large renewable buildout pipeline
A substantial 11.4 GW under construction represents durable capacity growth that should drive higher future generation and contracted revenues as projects come online. This pipeline supports long-term transition to renewables and revenue diversification away from fossil generation.
Scale and manageable leverage
A large equity base versus debt (roughly 34.4B equity vs ~17.0B debt) and utility-level leverage provide financial flexibility for capex and project financing. This balance-sheet scale supports sustained investment in renewables while limiting refinancing pressure.
Diversified EBITDA mix and recent profitability
Material EBITDA contributions from offshore, onshore/solar and flexible generation plus positive margins show diversified cash generation across business lines. This mix reduces single-segment dependency and supports longer-term earnings resilience despite commodity cycles.
Negative Factors
Multi-year revenue decline
A four-year topline contraction, with a large 2025 drop, signals structural demand or price challenges that undermine organic growth. Persistent revenue shrinkage constrains margin leverage and makes funding large renewables capex more sensitive to external financing and project execution.
Persistently negative free cash flow
Multi-year negative free cash flow (c. -4.9B in 2025) reflects heavy capex and weak cash conversion, increasing reliance on equity injections and external funding. This reduces near-term financial flexibility and raises execution risk if capital markets tighten or projects delay.
Renewables exposure to weather & policy economics
Significant sensitivity to wind variability and adverse auction economics in the UK create structural earnings volatility for the renewables fleet. This can depress long-term returns on recent buildouts and complicate future bidding and project economics.
RWE AG (RWEOY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$48.29B
Dividend Yield2.37%
Average Volume (3M)2.54K
Price to Earnings (P/E)11.0
Beta (1Y)0.08
Revenue Growth-8.14%
EPS Growth-15.92%
CountryUS
Employees20,985
SectorUtilities
Sector Strength65
IndustryDiversified Utilities
Share Statistics
EPS (TTM)1.32
Shares Outstanding743,841,200
10 Day Avg. Volume0
30 Day Avg. Volume2,537
Financial Highlights & Ratios
PEG Ratio-0.27
Price to Book (P/B)0.96
Price to Sales (P/S)1.95
P/FCF Ratio-6.79
Enterprise Value/Market Cap1.00
Enterprise Value/Revenue2.76
Enterprise Value/Gross Profit12.99
Enterprise Value/Ebitda5.71
Forecast
1Y Price Target
$67.67Price Target Upside4.33% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
EPS Forecast (FY)3
Revenue Forecast (FY)$26.55B
RWE AG Business Overview & Revenue Model
Company DescriptionRWE 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 MoneyRWE AG generates revenue through several key streams. The primary source of income comes from electricity generation, where the company produces and sells electricity to consumers and businesses. This includes revenues from both traditional energy sources and a growing share from renewable energy investments. RWE also earns money through gas supply and trading services, capitalizing on fluctuations in energy prices. Additionally, the company enhances its earnings through strategic partnerships, joint ventures, and participation in energy markets across Europe. The transition to renewable energy is supported by government incentives and subsidies, which further bolster RWE's financial performance. Furthermore, RWE engages in energy trading, optimizing its portfolio to maximize profitability amidst changing market conditions.
RWE AG Earnings Call Summary
Earnings Call Date:Nov 12, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:May 13, 2026
Earnings Call Sentiment Neutral
The earnings call reflects a strong financial performance with significant progress in construction projects and successful strategic transactions. However, there are challenges in the renewable energy sector due to weaker wind conditions and potential issues with future project bids in the U.K.Q3-2025 Updates
Positive Updates
Strong Financial Performance
RWE achieved more than 80% of its full-year 2025 adjusted EPS target in the first 9 months.
Successful Sale of Data Center Development Project
Concluded the sale of a data center development project in the U.K. with a book gain of EUR 225 million.
Progress in Construction Projects
11.4 gigawatts under construction with more than 2 gigawatts scheduled to start operation by end of the year.
EUR 3.2 billion Investment from Apollo Global Management
Secured funding for a 25.1% stake in Amprion, contributing to strengthening the balance sheet.
Share Buyback Program Progress
EUR 1.5 billion share buyback program proceeding well, with 26.5 million shares bought back.
Improved Trading Performance
Supply & Trading business showed a good performance with a 9 months result of EUR 150 million.
Negative Updates
Lower Adjusted EBITDA
Adjusted EBITDA lower due to normalized prices, weak wind conditions in Europe, and low trading result in the first half of 2025.
Weak Wind Conditions Affect Offshore Wind Earnings
Offshore Wind adjusted EBITDA was EUR 915 million, below last year due to weak wind conditions in H1 and lower hedge prices.
Challenges in U.K. Offshore Wind Auction
Disappointment with low budget for UK AR7 auction, potentially affecting future project bids.
Increased Net Debt
Net debt stood at EUR 15.7 billion with expectations of EUR 12.5 billion by year-end.
Company Guidance
In the recent RWE conference call, CFO Michael Müller provided detailed guidance and an overview of the company's financial performance for the first nine months of fiscal 2025. RWE achieved over 80% of its full-year adjusted EPS target, with a notable non-recurring book gain of EUR 225 million from a data center sale in the UK. The company reported an adjusted EBITDA of EUR 3.5 billion, with EUR 915 million from offshore wind, EUR 1.2 billion from onshore wind and solar, and EUR 1.1 billion from flexible generation. A strong trading performance in the third quarter led to a Supply & Trading result of EUR 150 million. RWE confirmed its dividend target of EUR 1.2 per share and maintained its adjusted EBITDA guidance between EUR 4.55 billion and EUR 5.15 billion. Net debt stood at EUR 15.7 billion, with expectations to reduce it to around EUR 12.5 billion by year-end, facilitated by a EUR 3.2 billion equity contribution from Apollo Global Management. The company is progressing well with 11.4 gigawatts under construction, intending to start operations of over 2 gigawatts by the end of the year.RWE AG Financial Statement Overview
Summary
Balance sheet strength and moderate leverage support stability, and profitability has been solid in the last two annual periods. Offsetting this, revenue has declined for four straight years (including a steep drop in 2025) and cash conversion is weak with persistently negative free cash flow, increasing reliance on external funding.Income Statement
Profitability has been strong in the last two annual periods, with net profit margins around ~21% (2024) and ~18% (2025) and solid EBITDA margin in 2025 (~16.6%). However, the topline trajectory is a clear headwind: revenue declined for four straight years (2022–2025), including a steep drop in 2025 (-21.4%). Margins also show elevated volatility (e.g., much higher gross/EBITDA margins in 2023–2024 vs. sharply lower gross margin in 2025), suggesting earnings quality and sustainability are less stable than the headline net income implies.62
Positive
Balance Sheet
Leverage appears manageable for a utility profile, with debt-to-equity running roughly ~0.43–0.57 in 2022–2025 (and ~0.49 in 2025), supported by a large equity base (2025 equity ~34.4B vs. debt ~17.0B). Returns on equity have improved versus 2023 (ROE ~4.6%) and remain reasonable in 2025 (~8.8%), though down from a stronger 2024 (~16.3%). Overall, the balance sheet looks resilient, but return metrics have been inconsistent year-to-year.70
Positive
Cash Flow
Operating cash flow is consistently positive (2022–2025), but free cash flow is persistently negative from 2022 through 2025 (including about -4.9B in 2025). Free cash flow also fails to support reported profits in recent years (free cash flow to net income is negative in 2022–2025), pointing to heavy reinvestment/capex demands and weaker cash conversion. While utilities can run negative free cash flow during major buildout cycles, the multi-year pattern increases reliance on funding and reduces near-term financial flexibility.42
Neutral
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 16.93B | 24.22B | 34.52B | 38.37B | 24.53B |
| Gross Profit | 1.34B | 8.65B | 14.04B | 6.69B | 6.34B |
| EBITDA | 2.81B | 10.68B | 9.44B | 2.91B | 3.57B |
| Net Income | 3.01B | 5.13B | 1.45B | 2.72B | 721.00M |
Balance Sheet | |||||
| Total Assets | 107.43B | 98.44B | 106.51B | 138.55B | 142.31B |
| Cash, Cash Equivalents and Short-Term Investments | 13.34B | 11.94B | 14.64B | 20.46B | 13.87B |
| Total Debt | 17.00B | 15.79B | 13.67B | 15.62B | 12.11B |
| Total Liabilities | 65.89B | 64.82B | 73.35B | 109.27B | 125.31B |
| Stockholders Equity | 34.37B | 31.55B | 31.57B | 27.58B | 15.25B |
Cash Flow | |||||
| Free Cash Flow | -4.86B | -2.76B | -5.74B | -2.08B | 3.58B |
| Operating Cash Flow | 4.76B | 6.62B | 4.24B | 2.41B | 7.27B |
| Investing Cash Flow | -8.73B | -9.71B | -2.81B | -9.89B | -7.74B |
| Financing Cash Flow | 6.83B | 1.12B | -1.56B | 8.62B | 1.46B |
RWE AG Technical Analysis
Positive
64.86
Price Trends
62.06
Positive
56.71
Positive
49.65
Positive
Market Momentum
1.26
Negative
55.19
Neutral
73.37
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RWEOY, the sentiment is Positive. The current price of 64.86 is above the 20-day moving average (MA) of 63.63, above the 50-day MA of 62.06, and above the 200-day MA of 49.65, indicating a bullish trend. The MACD of 1.26 indicates Negative momentum. The RSI at 55.19 is Neutral, neither overbought nor oversold. The STOCH value of 73.37 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for RWEOY.
RWE AG Peers Comparison
UnderperformOutperform
Sector (66)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
70 Outperform | $7.25B | 10.08 | 17.23% | 12.98% | -0.38% | -53.94% | |
67 Neutral | $48.29B | 10.98 | 6.86% | 2.37% | -8.14% | -15.92% | |
66 Neutral | $17.65B | 18.10 | 5.60% | 3.62% | 6.62% | 11.55% | |
59 Neutral | $16.85B | 35.60 | 9.74% | 4.92% | 8.14% | ― | |
58 Neutral | $59.92B | 31.37 | 5.82% | 2.91% | 9.07% | -28.58% | |
52 Neutral | $10.05B | 10.76 | 20.35% | 5.06% | -1.55% | 12.83% |
* Utilities Sector Average
RWEOY
RWE AG
63.65
29.28
85.19%
BIP
Brookfield Infrastructure
35.56
7.04
24.67%
CIG
Companhia Energetica Minas Gerais
2.35
0.75
46.69%
SRE
Sempra Energy
93.46
25.28
37.08%
AES
AES
14.08
1.90
15.57%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.