Morningstar

RWE Earnings: Great Start to the Year as Preannounced in Late April, Shares Undervalued

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Securities In This Article
RWE AG Class A
(RWE)

We maintain our fair value estimate of EUR 53 per share after no-moat RWE RWE released its final first-quarter results. Shares look materially undervalued. There was no major surprise in this print since preliminary results had been released on April 27. Results were impressive, with EBITDA jumping almost fivefold. Results included divisional earnings and drivers, while the 2023 guidance was conservatively confirmed.

The main new information of the final results is the net debt. It was EUR 5.7 billion at the end of March versus a EUR 1.6 billion net cash position at year-end 2022. The main driver of the EUR 7.3 billion negative net change in cash was the EUR 6.3 billion acquisition of Con Edison Clean Energy Businesses. Otherwise, adverse timing effects including cash outflows related to margin calls drove a EUR 1.6 billion increase in net debt.

The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.

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About the Author

Tancrede Fulop, CFA

Senior Equity Analyst
More from Author

Tancrede Fulop, CFA, is a senior equity analyst, Europe, for Morningstar*. He covers main European utilities and renewables. His coverage includes the largest diversified utilities like Iberdrola or Enel, pure renewables developers like Orsted and regulated utilities like National Grid.

Before joining Morningstar in 2017, Fulop worked for Schlumberger Business Consulting as a financial and economist analyst. He wrote a piece on the consequences of the COP 21 for the oil & gas industry and conducted financial & operational due diligences of OFS companies. Previously, he was a senior research associate covering European utilities for Raymond James from 2011 to 2015. He built up power price forecasts.

Fulop holds a bachelor’s degree in economics and management and a master’s degree in finance from the University Paris II Pantheon-Assas. He also holds the Chartered Financial Analyst® designation.

* Morningstar Holland BV (“Morningstar”) is a wholly owned subsidiary of Morningstar, Inc

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