Rwe Stock: Investment Cuts Despite Strong Performance

RWE's recent strategic shift has sent ripples through financial markets as the energy provider announced a significant reduction in its investment plans through 2030. The Essen-based company will now invest €35 billion in renewable energy expansion instead of the originally planned €45 billion, citing market uncertainties, supply chain issues, geopolitical risks, and rising interest rates. This cautious approach includes raising minimum return requirements for new investments from 8% to 8.5%. Despite these cutbacks, RWE performed better than expected operationally in 2023, though its adjusted EBITDA fell by over 25% to approximately €5.7 billion. The company's share price dropped by 3% to €32.06 following the announcement, despite having gained roughly 16% since mid-February.

Analysts Remain Optimistic Despite Forecast Reduction

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Sollten Anleger sofort verkaufen? Oder lohnt sich doch der Einstieg bei Rwe?

Financial experts view the recent stock decline as a potential buying opportunity. JPMorgan analyst maintains an "Overweight" rating with a price target of €47.50, praising the company's disciplined capital allocation strategy as a positive signal to shareholders. Jefferies also upholds its "Buy" recommendation with a €40 price target. For the current year, RWE forecasts further decline in adjusted EBITDA to between €4.55 and €5.15 billion, attributed to deteriorating electricity margins and normalization of trading business. Nevertheless, the company plans to increase its dividend from €1.10 to €1.20 per share and remains committed to its mid-term earnings target of €4 per share by 2030, despite the reduced investment program.