Berenberg raised its rating on E.ON to buy from hold and lifted the price target to €21 per share, up from €19.30, as a recent pullback in the stock created an entry opportunity for the German utility.
The upgrade follows E.ON’s shares climbing 1.5% in early trading on Wednesday, after the company’s stock had retreated in the prior session. Berenberg’s lead analyst Andrew Fisher cited the valuation decline as an opportunity to invest in a regulated utility positioned for expanded growth in Germany’s electricity grids.
The bank also raised its capital expenditure forecast for E.ON to €49.7 billion for the 2026–2030 period, exceeding the company’s own guidance of €48 billion. Berenberg projects adjusted net income for 2030 to be 5% above E.ON’s guidance, aligning with broader market expectations.
Analysts upgraded earnings-per-share estimates by an average of 3% for the 2029–2035 period, reflecting expectations of stronger profitability as Germany accelerates investments in power infrastructure. The bank noted significant demand, need, and political support for grid modernization, which is expected to underpin E.ON’s growth trajectory.
Berenberg’s outlook incorporates Germany’s upcoming regulatory periods for gas (2028–2032) and electricity (2029–2033), with the electricity return-on-equity proposal next year anticipated to reflect higher average bond yields. The bank calculates E.ON’s combined electricity and gas permitted RoE could reach its modeled target of 6.5% even without additional incentives, supported by a roughly 90-basis-point advantage in electricity RoE and WACC components over gas.
On regulatory proposals, Berenberg described the Federal Network Agency’s (BNetzA) draft gas return framework as below expectations, though it still expects a broadly favorable remuneration package for the sector.
