E.ON (+) : Standing Ovo-ation

Research evidence excerpt

E.ON (+) : Standing Ovo-ation

EQUITIES

UTILITIES & CLEAN ENERGY

E.ON OUTPERFORMPRICE* EUR18.7  TARGET PRICE EUR20.7 (UPSIDE 10%) TARGETnon materialPRICE EPS 2%26e nonEPSmaterial27e

Standing Ovo-ation

FY guidance has been derisked after E.On booked nearly half of it already in Q1, and the co14 MAY 2026

Securities Research Report expects the Ovo acquisition to be nearly EUR1bn accretive to balance sheet headroom as well as

Production time: 06:01* (London time)

being low-mid s.d. accretive to EPS by 2030. Both are moderate positives for the inv. case.

Research Analysts & Publishing Entities

Maintain O/P.

Harry Wyburd

BNP Paribas London Branch What we learned at Q1 – Ovo balance sheet accretion & FY numbers derisked(+44) 203 430 8665

harry.wyburd@uk.bnpparibas.com Two things that mattered: 1) Ovo deal will be close to EUR1bn accretive to balance sheet capacity

once integrated (shifting spare headroom up notionaly to cEUR6-11bn now) in addition to being

low-mid single digit % accretive to net income by 2030, and 2) Q1 numbers were very strong, with

48% of FY guide already booked in Q1, and although CFO tried to talk that down on the call we

think co is now very comfortable on at least meeting FY guidance / consensus. Full cc takes here.

Marginally positive for the investment case

Despite being an unusual deal for a company keeping back balance sheet for likely future German

distribution capex upgrades, it’s now clear that Ovo was an opportunity to both create synergy-

driven value, and improve FCF and balance sheet capacity at the same time. That is positive

overall, although the figures involved are quite small in a group context. De-risking FY numbers is

also a small positive. Overall these points support the moderate move up in the shares yesterday.

Minor model tweaks