'Into crisis mode', Kepler Cheuvreux ups utilities on Middle East conflict impacts

RWE AG

16/03/2026 11:21

** Kepler Cheuvreux upgrades Germany's RWE RWEG.DE and Britain's Centrica CNA.L to "hold" from "reduce" after moving the utilities' stocks into "crisis mode territory" due to impacts of the Middle East conflict

** Kepler raises RWE's PT by about 25% to 55 euros per share, Centrica's by 21%, sees the crisis to "very likely" have positive effects

** "As long as the situation is fragile, we prefer to "sit" on the flexible generators and energy trading names in the sector, which could produce extra gains as long as markets remain impacted," the broker says

** It expects government intervention – such as sector price caps, windfall taxes – to largely exempt energy solution providers, noting possibility of higher tax rates but no cap on absolute income

** "The U.S. seems to have underestimated Iran's grip on the Strait of Hormuz, even with much of its military power destroyed." - the broker adds

** RWE and Centrics's stocks are up respectively about 26% and 30% year-to-date

 (Reporting by Danny Callaghan)

 ((danny.callaghan@thomsonreuters.com))