E.ON Stock: Year-End Rally and Long-Term Prospects

Last Updated: 30. November 2023By

In the last two months, the E.ON share has gained a strong 12 percent and the paper is starting the year-end sprint firmly. The at most solid quarterly figures due to the outlook for Q4 have only briefly burdened the title – after 11 months of the stock exchange year, the E.ON share has gained around 26 percent in 2023.

Even if a weaker result is expected for the current 4th quarter, E.ON has recently held on to the targets raised in the summer. The billion-dollar investments are still running as planned, the energy company from Essen is likely to be well utilized in the coming years. The result: For long-term investors, the E.ON share is definitely worth a look.

E.ON with decent figures after 9 months After the first 3 quarters of the financial year, E.ON has of course achieved less turnover than in the previous year, but the adjusted profit could rise strongly. Thus, the adjusted EBITDA amounts to almost 7.8 billion euros, 27 percent above the value from 2022, and the adjusted consolidated profit even increased by 38 percent to just under 2.9 billion euros.

E.ON is sticking to the forecast raised after the half-year: The adjusted EBITDA is expected to be between 8.6 and 8.8 billion euros, and the adjusted profit between 2.7 and 2.9 billion euros. Here, a weaker Q4 is also taken into account in the forecast through the „passing on of the reduced wholesale prices as part of price reductions“ (quote from E.ON nine-month report).

With regard to the planned investments, E.ON is on track in 2023. Instead of the previously targeted volume of around 5.8 billion euros, the investments are now expected to amount to around 6.1 billion euros in the full year.

E.ON share: why it looks good for the long term The gigantic investments set the course for the future of E.ON: The classic power plant business plays no role anymore, the topics of the DAX company are energy transition and network infrastructure. Here, the Essen-based company is likely to have plenty to do in the coming years and to reap decent profits.

In the short term, the paper can still go up as part of a year-end rally. However, investors should keep the strong performance in mind – on an annual basis, the E.ON share has gained around 31 percent, corrections are also possible here. For medium- and long-term oriented investors, the paper from E.ON is definitely interesting in any case. The prospects are good, the dividend yield with a good 4 percent as well.