Publication date: October 2, 2025 

German energy giant RWE was the subject of a research article by us in September 2025. In addition to the interesting Tech sector, the major players in the international energy transition continue to attract attention. Although developments in the energy sector are not as fast as in the Tech sector, if an interesting situation presents itself then we would like to present on the opportunities for you as an investor. This very situation is currently happening at RWE.

It is valuable to first read through the September 10, 2025 research article on RWE. That way you become fully informed and can best evaluate this article.

Click HERE for the research article.

What is the current situation at RWE?

What stands out in the policy of the past few months is that RWE is taking a more critical and cautious approach to new investments in addition to putting more effort into modern technology such as Artificial Intelligence. RWE has lowered its investment plans compared to previous plans.

Over the period 2025-2030, the amount has been reduced by about €10 billion to about €35 billion of net investments. This reduction reflects a tighter capital allocation. RWE is tightening its return requirements, such as requiring new projects to deliver a higher internal rate of return and being more cautious in risky investments, particularly outside Europe.

In recent months, RWE withdrew from the "Hyphen" project in Namibia (green ammonia and hydrogen) worth about $10 billion. This move is part of a reassessment of the project portfolio. In addition, new offshore wind developments in the US were postponed, partly due to political uncertainties under the Trump administration.

In June 2025, RWE announced a strategic partnership with Amazon Web Services (AWS). The intention is for AWS to help RWE with cloud services, AI and data analytics to improve operational efficiency, especially in energy trading, asset optimization and forecasting.

RWE is conducting a share buyback program to support shareholder value. In August 2025, the company purchased 213,349 shares in a tranche of their ongoing buyback program.

While caution in investment has increased, RWE of course continues to invest and expand. There are currently around 11.2 GigaWatts of projects under construction. More than 3 GigaWatts of these should be operational in the second half of 2025. RWE entered into a long-term agreement with TotalEnergies to supply 30,000 tons of green hydrogen annually from 2030 through the electrolysis plant in Lingen, which is scheduled to come on stream in 2027. Entering into long-term contracts such as with TotalEnergies gives certainty about sales of (green) energy/hydrogen.

How do analysts currently view the energy sector and RWE?

Both the fundamental analysts and the technical analysts consulted are positive. The average 12-month price target is at €42.63. With a current share price at around €38.50, the market believes RWE shares can still rise more than 10%. Reasons include the board's confirmation of the positive outlook 2025 including a dividend target of €1.20 per share.

The energy sector is also analyzed positively. According to Bloomberg NEF, electricity generation from renewable energy could increase by 84% in the next 5 years. Investments in the energy sector are at record levels by 2025 (estimated to be around $3.3 trillion worldwide) according to the IEA. With the rise of electric transportation, heat pumps, data centers, etc., electricity demand will rise sharply and the cost of solar, wind and battery storage will continue to fall, making these technologies increasingly competitive. Green hydrogen is seen as a potentially important part of the energy system, especially if the cost of electrolyzing and operational techniques continue to fall.

In most scenarios, gas (and to a lesser extent oil) continues to play a role as a "bridge" or flexible backup, especially in regions where the transition is more difficult. Under strong climate policies such as "Bridges" or "Net Zero"-like paths, the role of oil and gas declines markedly, while renewables (wind, solar) rise sharply.

Analysts stress that policy certainty, regulation (subsidies, carbon prices, grid tariffs) and investment in grid infrastructure are crucial to whether the transition actually happens. Grid capacity, connection between regions, storage and flexibility will become increasingly important to accommodate variability in solar/wind generation.

What is our expectation from RWE?

We go along with the analysts' positive expectation. In doing so, our algorithm currently gives a strong bullish scenario in both the short and longer term as most likely.

Below is the price chart of RWE since mid-2007. Striking are the large percentage drops in long-term trends. From 2008 to 2016, the stock lost over 80% in a clear bear market trend. Six years later, the share price is back up 400% at an important level of €40. The correction that followed of over 30% has been completed at €27, and the price is moving vigorously towards €40.

Below is the price chart of RWE zoomed in on the period from the end of 2024. With the powerful break through the €36,- barrier, the first impetus has been given for a final breakthrough.

In the short term, our algorithm expects the price to test the €40 limit. After some resistance, the trend is expected to continue, allowing RWE to pull through to €47 within 12 months.

For the long term, the most likely scenario at present is a completion of the trend at €59 in a few years.

Conclusion

RWE is well-positioned for the ongoing development of the energy transition. Both the sector and the company are viewed positively internationally for the future.

After the healthy price correction, the share price is currently breaking out and is at the beginning of a strong continuation of the next upward trend.

For the next 12 months, our algorithm has a price target of €47, giving a return potential of 20%. Given the long trends in the stock, you may consider a price target 50% above the current level in a few years. As a result, you can consider a portfolio diversification with RWE and hold it for a longer period of time.

Disclaimer: Investing involves risk. Our analysts are not financial advisors. Always consult an advisor when making financial decisions. The information and tips provided on this website are based on our analysts' own insights and experiences. They are therefore for educational purposes only.