Morgan Stanley Trims E.ON Rating as Capex Discipline and Data-Centre Ambitions Divide the Street
Published on 11/12/2026 at 04:52 | Editorial boerse-global.de
Morgan Stanley cut E.ON to "Equal-weight" from "Overweight" on Monday, though the broker left its EUR 21 price target untouched — a downgrade that rests on valuation rather than a revised view of the German utility's worth. The move puts Morgan Stanley at odds with Jefferies, which reaffirmed its buy recommendation a day earlier with a EUR 22.70 target. Analyst Ahmed Farman's stance at Jefferies contrasts with the more cautious positioning from Morgan Stanley, and the spread between the two targets is narrow enough to suggest the disagreement is about timing and momentum rather than fundamentals.
The shares have been under pressure through the week. E.ON fell 1.9% on the day Jefferies published, then lost a further 2.4% to trade at EUR 18.82 as investors digested the nine-month figures. dpa-AFX flagged the company's decision to hold its investment plans steady — analysts had expected an increase — as a possible trigger for the negative market reaction. Reuters reported that the results failed to entice buyers.
Earnings Edge Higher While Operations Stand Still
For the first nine months of 2026, E.ON booked adjusted group EBITDA of EUR 7.1 billion. The operating result matched the prior-year level, leaving the top line flat. Adjusted group net income, by contrast, climbed 4% to EUR 2.2 billion — profit growth achieved without any improvement in operating earnings. Capital expenditure over the same period reached EUR 5.2 billion.
Should investors sell immediately? Or is it worth buying E.ON?
Guidance for the full year was reconfirmed: adjusted EBITDA of EUR 9.4 billion to EUR 9.6 billion, and adjusted group net income of EUR 2.7 billion to EUR 2.9 billion. The company also stood by its outlook through 2030. On the investment side, E.ON reiterated roughly EUR 8.7 billion of capex for the current year and around EUR 48 billion through the end of the decade.
Finance chief Nadia Jakobi pointed to rising infrastructure needs and the importance of dependable regulatory frameworks — a reminder that the spending programme depends as much on policy certainty as on the company's own balance sheet.
Old Reactor Sites Eyed for Server Halls
Jakobi also confirmed that E.ON is examining whether former German nuclear power plant sites could be converted into data centres, according to Reuters. The review is at the assessment stage, covering possible repurposing of the retired plant locations. It marks a potential second life for assets that have sat idle since Germany's nuclear exit, and comes as demand for computing capacity across Europe keeps climbing.
Whether that option matures into anything concrete is a question for another day. For now, the market's attention is fixed on a flat operating result, a capex budget held rather than raised, and a pair of brokers reading the same numbers in opposite directions.
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E.ON Stock: New Analysis - 12 November
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