RWE (RWEG.DE): Supported by possible guidance upgrade at 2Q26, German capacity auctions and DC sites sell downs

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RWE (RWEG.DE): Supported by possible guidance upgrade at 2Q26, German capacity auctions and DC sites sell downs

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28 Jul 2026 01:39:37 ET │ 22 pages

RWE (RWEG.DE)

Supported by possible guidance upgrade at 2Q26, German capacity

auctions and DC sites sell downs

CITI'S TAKE

We keep our Neutral rating on RWE with a TP of EUR60/share but initiate a Neutral90-day upside Catalyst Watch as we anticipate guidance raise at 2Q26

results, good outcome from the German gas capacity auction in September Catalyst Watch: Upside

and December (where RWE is bidding for c.3GW capacity), and another DC Price (27 Jul 26 17:30) €57.30

site disposal at any time from its portfolio of over 3GW connection points. Target price €60.00↑

Expect good 2Q26 and potential 2026 guidance upgrade — For 2Q26, we expect from €59.00

adj. EBITDA of EUR1,138m (+37%YoY) and ANI of EUR415m (+50% YoY). We believe Expected share price return 4.7%

RWE is likely to technically increase its full-year EBITDA target by c EUR0.4bn to Expected dividend yield 2.3%

account for the EUR0.3bn Eemshaven compensation booked in 1Q26 and the

EUR0.1bn Amprion additional contribution in 2H. We also think that higher Expected total return 7.0%

commodity and power prices may provide modest tailwinds for its power generation Market Cap €44,693M

and trading activities. Although some of this upside is already captured by US$50,809M

consensus, we believe small upgrades are still possible (EBITDA 2026: Citi at

EUR5.92bn, Cons. at EUR5.86bn, current guidance EUR5.2–5.8bn).

German gas capacity auctions in September and December — We believe the

German capacity auctions can yield highly attractive prices for RWE to deploy capital

to build 3GW of gas capacity. Total de-rated demand is 10.6 GW across the Price Performance