Increasing RWE’s Fair Value Estimate to EUR 25.5 on Higher Renewables Growth; Shares Undervalued
We are increasing our fair value estimate from EUR 19.30 to EUR 25.50 per share for RWE, chiefly on higher renewables growth. Our new fair value estimate involves a 2020 P/E of 12.5 times and an upside of 14% to the current share price. We reiterate our no-moat and stable trend ratings.Proforma RWE will be the third largest renewable player in Europe and the second global player in offshore wind. Renewables will produce a 2020 EBITDA of EUR 1.8 billion by our estimates, growing to EUR 2.3 bill...
RWE is an electricity and gas company. The Conventional Power Generation segment consists of the activities of RWE Power, Essent and RWE npower. The Supply/Distribution Networks Germany segment supplies electricity, gas and heat. The Supply Netherlands/Belgium segment comprises the activities of Essent in the Netherlands. The Supply United Kingdom segment comprises the operations of RWE npower. The Central Eastern and South Eastern European segment contains activities in the Czech Republic, Hungary, Poland, Slovakia, Turkey and Croatia. The Renewables, Upstream Gas & Oil and Trading/Gas Midstream segments include the activities of RWE Innogy, RWE Dea and RWE Supply & Trading, respectively.
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