RWE : Valuation breather: downgrade to Neutral

Research evidence excerpt

RWE : Valuation breather: downgrade to Neutral

EQUITIES

UTILITIES & CLEAN ENERGY

RWE PRICE*NEUTRALEUR56.6  TARGETFROMOUTPERFORMPRICE EUR59.7 (UPSIDE 5%) TARGET -2%PRICE EPS 6%26e nonEPSmaterial27e

RWE ADR PRICE*NEUTRALUSD65.6  TARGETOUTPERFORMFROMPRICE USD69.6 (UPSIDE 6%) TARGET -2%PRICE EPS 6%26e nonEPSmaterial27e

Valuation breather: downgrade to Neutral

RWE is part-way on a journey from being an expensive integrated utility to a cheap renewables utility.21 MAY 2026

Securities Research Report For now, we think multiples are a fair reflection of the mix and growth outlook as it stands today, and

Production time: 05:28* (London time)

we think profit-taking could cap further upside from catalysts later in the year. There is also a sliver

Research Analysts & Publishing Entities

of doubt hanging over 2026 earnings after a weak underlying 1Q. We are positive on renewables

Harry Wyburd going into 2H26, but we prefer to play this through other names for now. D/g to Neutral, TP to €59.7.BNP Paribas London Branch

(+44) 203 430 8665

harry.wyburd@uk.bnpparibas.com Valuation breather

Two factors drive our change in view: 1) the shares (+25% YTD) are now on c14x ‘30 cons. earnings,

putting them at the top of the integrated peer bracket and although well below EDPR, we think the

latter’s multiple reflects a purity premium which RWE doesn’t yet possess. Investor feedback has

been persistently sensitive to valuation in recent months, and peers (e.g. Iberdrola) have stopped

outperforming after hitting valuation glass-ceilings earlier in the year. We struggle to justify a further

20-30% upside from here. Moreover 2), a weak underlying Q1 has injected an element of doubt over

full year earnings which appear dependent on a strong recovery in trading in the balance of the year.