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On Wednesday, Citi analysts downgraded E.ON SE (ETR:EONGn) (EOAN:GR) (OTC:EONGY) stock from Buy to Neutral, while increasing the price target to EUR15.50, up from the previous EUR14.50. The adjustment comes after a significant year-to-date (YTD) surge in E.ON’s share price, which has risen by 46%. This increase is attributed to a reduction in political risk in Germany and the announcement of substantial fiscal spending plans, as well as an influx of capital into domestic European assets.
According to the analysts, the current valuation of E.ON’s stock, which includes a roughly 25% premium to its Regulatory Asset Base (RAB) and trades at 9.5 times its 1-year forward Enterprise Value/Earnings Before Interest, Taxes, Depreciation, and Amortization (EV/EBITDA), already reflects the potential positives. These positives are expected from an ongoing regulatory review and the possibility of an additional EUR10 billion capital expenditure by E.ON.
The review and capital expenditure are anticipated to be key catalysts for E.ON, with developments expected to unfold over the next three quarters. The culmination of these events is likely to be the announcement of ultimate guidance for the year 2029, which is scheduled for March 2026.
The analysts also noted the removal of E.ON from Citi’s European focus list. This decision aligns with their view that, despite the company’s strong performance, the current stock price largely incorporates the anticipated benefits from the regulatory environment and planned capital investments.
E.ON SE is an international, privately-owned energy supplier based in Essen, Germany, and is focused on energy networks, customer solutions, and renewable energy. As the company navigates through these regulatory and investment milestones, the market will be watching closely to see if E.ON can continue its growth trajectory and meet the expectations factored into its current stock valuation.
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