RWE (RWEG.DE) RWE beats and raises 2026 27 guidance

Equity Research 29 July 2026 | 6:00AM CEST

RWE (RWEG.DE): RWE beats and raises 2026-27 guidance

RWE pre-released strong first-half results and upgraded guidance for 2026-27; this Alberto Gandolfi | is likely to trigger positive earnings upgrades by the street. Besides two positive Goldman Sachs Bank Europe SE - Milan one-offs in 2026 (FlexGen and Trading, c.€400 mn in total), the guidance upgrade branch

also reflects underlying improvements in Renewables and FlexGen, as well as the Mafalda Pombeiro | integration of Amprion. Our estimates continue to imply c.20% upside risk to 2031 Goldman Sachs International guidance too, and we reiterate our Buy rating. Dhwani Khenwar | Solid H1 results. RWE pre-released solid profits. H1 EBITDA came in at just over €3 Goldman Sachs India SPL bn, up +c.45% vs last year. Capacity additions and stronger load factors support a strong double-digit growth in Renewable activities. FlexGen is up yoy on an underlying basis, and it is also supported by a positive one-off of +c.€300 mn. Trading activities have posted a strong EBITDA in the quarter (it includes a c.€100 mn positive one-off), more than offsetting the Q1 weakness. H1 Net income came in at €1.26 bn (€1.77 EPS), up by +c.60% vs last year. The bottom line would still have been strongly up (+c.20%), even once stripping out the one-offs.

Guidance for 2026 and 2027 upgraded. RWE upgraded guidance for 2026 and 2027. For 2026, this is from FlexGen (organically as well as from the one-off), Offshore and Amprion. For 2027, the upgrade comes from all divisions except Trading. Net income for 2026 is now projected at €1.95-€2.45 bn (was €1.55-€2.05 bn), which implies a mid-point EPS of €2.95 (was €2.55). For 2027, RWE is now targeting Net income at €2.2-€2.7 bn (was €1.9-€2.4 bn), which implies a mid-point EPS at €3.15 (was €3.05).

We see three sources of upside for 2031. As detailed in our recent report (here), we see three sources of upside, which could lift the 2031 EPS target to c.€5.50 from the current €4.55: (1) upside to Amprion ROE from the c.6.5-7% currently targeted to the peers’ average of 9-11% (Equity RAB at c.€23.5 bn by then), (2) stronger returns (IRRs) in US renewables, currently at 10-11%, which compare with “above 8.5%” currently targeted by RWE, and (3) upside from the domestic CCGT tender, which may lead to an attractive capacity payment on 3 GW of new capacity, we estimate.

Valuation methodology. Our 12-month price target is €71. Our price target is based: (1) 2/3 on our 2027E SOTP of €75.9/sh. We value the FlexGen business at a target valuation multiple of 8x and the renewables business using a DCF, based on a WACC of 6.1% and on capacity additions until 2035 with no terminal value; and, (2) 1/3 on the value of existing assets, at €61/share. When valuing existing assets, based on an EV/IC model, we assume no future growth beyond 2026.

Goldman Sachs does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. For Reg AC certification and other important disclosures, see the Disclosure Appendix, or go to Analysts employed by non-US affiliates are not registered/qualified as research analysts with FINRA in the U.S.

Key risks. Key downside risks to our view and price target include: (1) Recession and falling power demand; (2) Weaker-than-expected LNG and power prices; (3) Higher sovereign interest rates; (4) Weak execution in the renewable pipeline; and (5) GBP/USD depreciation.

RWEG.DE 12m Price Target: €71.00 Price: €55.62 Upside: 27.7%

Buy GS Forecast 12/25 12/26E 12/27E 12/28E Market cap: €39.2bn / $44.6bn EBITDA (€ mn) 5,087.0 5,713.5 6,596.0 7,279.3 Enterprise value: EBIT (€ mn) 2,868.0 3,273.5 3,934.1 4,376.5 €67.8bn / $77.3bn EPS (€) m ADTV: €93.1mn / $107.4mn EV/EBITDA (X) Germany P/E (X) Europe Utilities Dividend yield (%) 3.4 2.4 2.6 2.9 M&A Rank: 3 FCF yield (%) ( ) Leases incl. in net debt & EV?: Yes 3/26 6/26E 9/26E 12/26E EPS (€)

Source: Company data, Goldman Sachs Research…