Details on the closure of RWE by the DAX index
In a recent announcement, RWE, a prominent German energy company (WKN: 70312), reported a decline in profits for the first half of the year. The company's stock dropped 2.5%, making it the worst performer in the DAX, following the profit announcement [1].
The decline in profits was primarily due to weak wind conditions in Europe, challenging energy trading conditions, and lower margins in power forward sales due to high gas prices. As a result, the adjusted earnings per share (EPS) for RWE were €1.06, lower than the expected range of €1.80 to €2.50 by the end of the year [1].
However, analysts like Jefferies, JPMorgan, and Metzler have noted that RWE confirmed its annual and medium-term targets, implying expectations for recovery or stabilization in the second half [1]. The adjusted EBITDA for the first half of 2022 fell by more than a quarter to just over €2.1 billion, which was slightly below analyst expectations but did not prompt reducing the full-year guidance [1].
The CEO stated that half of the annual adjusted net earnings target per share had already been achieved by mid-year, supporting confidence in reaching the full-year forecast range between €1.80 and €2.50 EPS [1]. The first half of 2022 showed a significant earnings decline, but analysts have described the results as a "broad-based failure," reflecting difficulties particularly in energy trading and flexible power generation segments [1].
Despite these challenges, analysts like Bernstein remain cautious but optimistic, while DER AKTIONÄR remains firmly convinced of RWE's long-term strategy [1]. The 200-day line at around €32 is crucial for RWE's stock, and the stock has slipped below this line [1]. However, with the second half of the year approaching, investors and analysts will be closely watching RWE to see if the company can meet its targets and turn the tide.
[1] Source: Reuters, Bloomberg, and company press release.
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