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RWE: Future Returns Will Reflect Expanding US Solar And Hydrogen Platforms

Analyst Commentary Highlights Modest Valuation Increase for RWE Amid Strategic Shifts and Renewables Focus

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RWE
AnalystConsensusTarget
Not Invested
Published 24 Nov 2024

Update shared on 18 Dec 2025

Fair value Increased 2.00%
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Analysts have modestly raised their price target on RWE, now seeing approximately €1 higher fair value as they factor in slightly faster revenue growth, improved profit margins, and a lower expected future price-to-earnings multiple.

What's in the News

  • RWE completed construction of its first project in Louisiana, the 100 MW Lafitte Solar facility. The project is expected to be fully online by year end and generate around EUR 32 million in regional tax revenue over its lifetime (company announcement).
  • Lafitte Solar is backed by a long term PPA with Meta, which will receive all environmental benefits, including renewable energy certificates. This highlights RWE's role as a partner to major tech companies in decarbonising their operations (company announcement).
  • The Lafitte Solar project supported more than 150 peak construction jobs and included extensive community initiatives, such as school donations, food bank support, and funding a new playground and local park improvements (company announcement).
  • RWE continues to expand in green hydrogen through a 150 MW capacity reservation agreement with ITM Power for NEPTUNE V units. This builds on its prior 4 MW pilot and 200 MW GetH2 Nukleus electrolyser projects in Germany (company announcement).
  • RWE has signalled its intention to exit the Centre Manche 2 offshore wind consortium with TotalEnergies in France, even as the 1.5 GW project moves ahead under TotalEnergies' leadership with a planned EUR 4.5 billion investment (company announcement).

Valuation Changes

  • Fair Value: increased slightly from about €48.18 to €49.14 per share, implying roughly a €1 higher intrinsic value estimate.
  • Discount Rate: edged down marginally from approximately 6.48 percent to 6.46 percent, reflecting a slightly lower perceived risk or cost of capital.
  • Revenue Growth: risen modestly from around 6.71 percent to 6.76 percent, indicating a small uplift in long term top line expectations.
  • Net Profit Margin: improved meaningfully from roughly 7.78 percent to 8.80 percent, pointing to stronger expected profitability.
  • Future P/E: reduced from about 19.30x to 17.39x, suggesting a more conservative valuation multiple assumption despite improved fundamentals.

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