Goldman Sachs still bullish on German utilities
dpa / Focus Online
US investment bank Goldman Sachs says German utilities RWE and E.ON remain good investments, despite the coal exit, newswire dpa reports in an article carried by Focus Online. In an analysis published Friday, Goldman Sachs analyst Alberto Gandolfi argues that both utilities’ core businesses of remain strong, dpa reports. Gandolfi says the debate over Germany’s coal exit may have distracted investors from RWE’s strength in renewable energy, which is “the most attractively valued renewable energy company in Europe,” dpa reports, adding that compensation payments from the German government for shutting down coal plants could add to the utility’s stock value. Meanwhile, E.ON remains “one of the most attractive growth stories in the utility sector” over the long term, dpa reports.
The two utilities are currently navigating a complicated asset swap that could reshape German energy markets after they lost their traditional business models due to the shift towards decentralised renewables-based electricity supply. The deal, agreed in 2018, would leave E.ON as a major power supplier, focused on energy grids and retail customers, while RWE focuses on power production, including from renewables. Parts of the deal must still be cleared by EU anti-trust regulators.