RWE AG: Risk Reward Update

Research evidence excerpt

RWE AG: Risk Reward Update

erformance Current Stock Price Price Target Renewable Energy: Positive

Secular Growth: Positive

Source: Refinitiv, Morgan Stanley Research, Morgan Stanley Institutional Equities Division. The probabilities of our Bull,

View descriptions of Risk Rewards Themes here

Base, and Bear case scenarios playing out were estimated with implied volatility data from the options market as of 12

May 2026. All figures are approximate risk-neutral probabilities of the stock reaching beyond the scenario price in either

three-months’ or one-years’ time. View explanation of Options Probabilities methodology here

BULL CASE €75.00 BASE CASE €66.00 BEAR CASE €43.00

Back on track Further re-rating potential ahead Renewed concerns on investment plans

Our bull case assumes RWE re-rates to 9.8x We value each business division separately We envisage a bear case whereby the

EV/EBITDA and 22x P/E on 2027 numbers as through a DCF. We value Renewables market continues to discount no future

the market values future growth up to & targets to 2030 and assume value of 3GW growth in Renewables beyond those

beyond 2031 guide, 6GW new German CCGT new German CCGTs. We assume no terminal operating and offshore under construction,

through 2030's & all 3GW of data centre value and use business-specific WACCs. We given market concerns on renewables

site pipeline. We also assume an early coal apply a 6.7% WACC to Offshore & 6.6% for execution & value creation. We assume only

exit in 2026-27, either via lignite foundation Onshore Renewables, 7.8% for the Flexgen 1/2 value of new CCGT, no further DC Sites.

or just plants not running due to negative division, and Trading on 6x EV/EBITDA. We This scenario implies a value of €43/share &

lignite spreads.