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RWE AG (RWEOY)
OTHER OTC:RWEOY
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RWE AG
(OTC:RWEOY)
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Rating:61Neutral
Price Target:
$67.00
▲(6.32% Upside)
The score is primarily constrained by weak cash conversion (persistently negative free cash flow) and a softer near-term profitability/revenue trend, despite a solid balance sheet. Technicals are constructive but look overextended, while valuation is reasonable and the latest earnings call was broadly supportive with reaffirmed guidance and balance-sheet actions.
Positive Factors
Large contracted offshore pipeline (CfDs)
Securing 6.9 GW of 20‑year, inflation‑indexed CfDs materially increases long‑term revenue visibility for RWE’s offshore portfolio. Long-duration contracts reduce merchant exposure, support project finance and de‑risk cash flows as assets move from construction to operation.
Improving leverage and balance‑sheet support
Leverage metrics have meaningfully improved versus prior years, indicating a more constructive capital structure for a utility. Combined with recent equity injections and planned net debt reduction, this strengthens financial flexibility for capex, contracting and dividend policy over the medium term.
Diversified cash generation and operating cash flow
Consistently positive operating cash flow, supported by diversified earnings across offshore, onshore/solar and flexible generation, underpins RWE’s ability to fund ongoing construction and trading activities. Stable OCF cushions volatility and supports medium‑term execution of growth projects.
Negative Factors
Persistently negative free cash flow
Sustained negative free cash flow despite positive operating cash flow signals heavy capital intensity and working capital demands. This persistency constrains organic funding for growth, dividends or buybacks and increases reliance on asset sales or external capital for pipeline financing.
Revenue decline and margin compression
A step‑down in revenue and notable margin compression reduce structural earnings power versus the prior year. For a utility, weaker topline and lower margins heighten vulnerability to market cycles and can limit capacity to absorb higher capex or maintain payout targets over the medium term.
Renewables generation variability and auction/policy risk
Weather‑dependent generation exposes RWE to recurring volume and price volatility; weak wind seasons materially depress renewables EBITDA. Coupled with uncertain public auction outcomes in the U.K., this creates structural project revenue risk and can impede long‑term project return predictability.
RWE AG (RWEOY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$47.03B
Dividend Yield2.37%
Average Volume (3M)2.54K
Price to Earnings (P/E)18.3
Beta (1Y)0.02
Revenue Growth-8.14%
EPS Growth-15.92%
CountryUS
Employees20,985
SectorUtilities
Sector Strength65
IndustryDiversified Utilities
Share Statistics
EPS (TTM)1.36
Shares Outstanding743,841,200
10 Day Avg. Volume0
30 Day Avg. Volume2,537
Financial Highlights & Ratios
PEG Ratio0.02
Price to Book (P/B)0.67
Price to Sales (P/S)0.87
P/FCF Ratio-7.67
Enterprise Value/Market Cap1.20
Enterprise Value/Revenue2.62
Enterprise Value/Gross Profit8.13
Enterprise Value/Ebitda7.33
Forecast
1Y Price Target
$67.67Price Target Upside7.38% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
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:Mar 12, 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
Income statement and balance sheet are respectable (solid profitability history and manageable leverage), but the financial profile is weighed down by persistently negative free cash flow despite positive operating cash flow, and a softer TTM trend with lower revenue and compressed net margins versus 2024.Income Statement
Profitability is solid but trending weaker. In 2024 the company delivered strong earnings power (about 21% net margin) and healthy gross profitability, but TTM (Trailing-Twelve-Months) shows revenue down ~6.7% with net margin compressing to ~10.5%. Margins remain decent for the sector (TTM EBITDA margin ~34.9%), yet the step-down from 2024 suggests a less favorable earnings trajectory and higher volatility versus a typical utility profile.62
Positive
Balance Sheet
Balance sheet looks reasonably stable with moderate leverage and solid equity support. Debt-to-equity has improved versus 2021 (~0.79) and sits around ~0.43–0.59 in recent periods, which is manageable for a diversified utility. Returns on equity have been uneven (strong in 2024 at ~16.3% vs much lower in 2023 and ~6.9% TTM), indicating profitability variability rather than structural balance-sheet stress.71
Positive
Cash Flow
Cash generation is the weak spot. Operating cash flow is consistently positive (TTM ~5.9B), but free cash flow is negative in most recent periods (TTM about -4.9B; 2024 about -2.8B; 2023 about -5.7B), implying heavy investment needs and/or working-capital drag. Free cash flow also does not cover net income in recent periods (negative versus positive earnings), which reduces financial flexibility despite reported profitability.39
Negative
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 21.54B | 24.22B | 34.52B | 38.37B | 24.53B | 13.69B |
| Gross Profit | 6.94B | 8.65B | 14.04B | 6.69B | 6.34B | 3.47B |
| EBITDA | 7.70B | 10.68B | 9.44B | 2.91B | 3.57B | 1.59B |
| Net Income | 2.27B | 5.13B | 1.45B | 2.72B | 721.00M | 1.05B |
Balance Sheet | ||||||
| Total Assets | 96.20B | 98.44B | 106.51B | 138.55B | 142.31B | 61.67B |
| Cash, Cash Equivalents and Short-Term Investments | 8.90B | 11.94B | 14.64B | 20.46B | 13.87B | 8.99B |
| Total Debt | 0.00 | 15.79B | 13.67B | 15.62B | 12.11B | 3.35B |
| Total Liabilities | 58.53B | 64.82B | 73.35B | 109.27B | 125.31B | 43.70B |
| Stockholders Equity | 34.01B | 31.55B | 31.57B | 27.58B | 15.25B | 17.18B |
Cash Flow | ||||||
| Free Cash Flow | -4.86B | -2.76B | -5.74B | -2.08B | 3.58B | 817.00M |
| Operating Cash Flow | 5.88B | 6.62B | 4.24B | 2.41B | 7.27B | 4.17B |
| Investing Cash Flow | -10.46B | -9.71B | -2.81B | -9.89B | -7.74B | -4.35B |
| Financing Cash Flow | 3.38B | 1.12B | -1.56B | 8.62B | 1.46B | 1.77B |
RWE AG Technical Analysis
Positive
63.02
Price Trends
54.67
Positive
50.78
Positive
45.38
Positive
Market Momentum
2.68
Negative
81.55
Negative
93.80
Negative
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 63.02 is above the 20-day moving average (MA) of 59.39, above the 50-day MA of 54.67, and above the 200-day MA of 45.38, indicating a bullish trend. The MACD of 2.68 indicates Negative momentum. The RSI at 81.55 is Negative, neither overbought nor oversold. The STOCH value of 93.80 is Negative, 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 | $6.90B | 8.74 | 13.35% | 12.98% | -0.38% | -53.94% | |
66 Neutral | $17.65B | 18.10 | 5.60% | 3.62% | 6.62% | 11.55% | |
65 Neutral | $56.79B | 26.79 | 7.10% | 2.91% | 9.07% | -28.58% | |
65 Neutral | $10.43B | 8.92 | 23.02% | 5.06% | -1.55% | 12.83% | |
61 Neutral | $47.03B | 18.31 | 6.59% | 2.37% | -8.14% | -15.92% | |
59 Neutral | $16.70B | 37.04 | 7.99% | 4.92% | 8.14% | ― |
* Utilities Sector Average
RWEOY
RWE AG
64.36
34.21
113.44%
BIP
Brookfield Infrastructure
36.70
5.64
18.16%
CIG
Companhia Energetica Minas Gerais
2.21
0.54
32.18%
SRE
Sempra Energy
87.00
8.15
10.34%
AES
AES
16.09
6.06
60.34%
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.