RWE's US Power Play and Buyback Drive Propel Shares to Decade Peak

RWE shares surge 26% YTD as a €17B US expansion for AI data center power and a €1.5B share buyback fuel growth. Analysts raise targets ahead of dividend vote.

RWE shares are trading at levels not seen in over ten years, fueled by a massive strategic bet on the American power market and aggressive shareholder returns. The stock recently touched €59.06, consolidating just below the psychologically significant €60 mark after a 26% surge since the start of the year. This rally has prompted analysts at JPMorgan and RBC to raise their price targets to €65.00 and €62.50, respectively.

The core driver is a planned €17 billion investment program in the United States through 2031. The Essen-based energy giant aims to build 15 new gas generation projects in regions like Texas and Arizona. These integrated energy campuses, combining gas, solar, and storage technology, are designed to provide reliable baseload power for the booming demand from new AI data centers. This expansion is set to boost RWE's US capacity from 13 gigawatts today to 22 gigawatts.

Supporting this growth narrative is a substantial share buyback. The company’s ongoing repurchase program, worth up to €1.5 billion, is approaching its planned mid-year completion. Between 30 March and 2 April 2026 alone, RWE bought back nearly 290,000 of its own shares for approximately €16.7 million. The third tranche of the program has already seen over 6.7 million shares repurchased by early April. This direct return of capital, combined with the strategic expansion, is broadly viewed positively by the market.

Financially, the company has laid out clear targets to underpin its ambitions. It forecasts earnings per share to rise to around €4.40 by 2031, up from €2.48 currently. The EBITDA guidance for 2026 stands between €5.2 billion and €5.8 billion, with an average target return on investment above 8.5%. Operationally, RWE is well-hedged for the near term, with about 80% of its expected power production for 2026 already sold at fixed prices.

The stock's powerful uptrend, which has seen it trade more than 33% above its 200-day moving average, has been further supported by a favorable environment. While broader indices faced pressure, RWE benefited from elevated energy prices. Its single-digit forward price-to-earnings ratio and strategic divestments provide additional financial flexibility.

Beyond fossil fuels, the renewables division offers stability. A long-term power purchase agreement with semiconductor specialist ASML, securing revenues until 2038, exemplifies RWE's strategy of smoothing volatile spot market earnings with fixed industrial contracts.

Investors now face two imminent milestones. The virtual Annual General Meeting on 30 April 2026 will vote on a proposed dividend increase to €1.20 per share for the past financial year, with a further raise to €1.32 planned for 2026. This will be followed by the release of first-quarter 2026 results on 13 May, offering a concrete look at whether the operational strength is translating to the bottom line.