Clearway Energy, Inc. (CWEN) stock intrinsic value fair value estimate & owner earnings analysis

Clearway Energy owns wind, solar, battery storage and natural-gas-fired power plants in the United States and sells their output mainly under long-term contracts. About 91% of 2025 revenue came from sources not tied to burning fossil fuel for power. Public Class A and Class C shareholders (about 119 million shares) own roughly 58% of the operating partnership; the sponsor, Clearway Energy Group, holds the rest. We therefore spread the whole company's owner earnings over all partnership units (about 203 million) and quote the result per public share. How we measured earnings. We start with operating cash flow, remove working-capital swings and the small stock compensation cost, and deduct maintenance capital spending (total capex less an estimated growth portion tied to revenue growth). Non-cash charges such as depreciation and about $187 million a year of intangible amortization are already excluded from cash flow, so we did not add anything back twice. Because the company reports a large accounting net loss (a $231 million loss in 2025) driven by tax-equity accounting and depreciation, cash flow is the better guide. Owner earnings per share were about $2.34 (2018), $1.29 (2019), $2.44, $2.82, $3.25 (2022, which includes the Thermal business sold in October 2022), $2.85 (2023), $2.65 (2024) and $1.99 (2025). We anchor on 2023-2025, the period after the Thermal sale, taking the median: $2.65 per share. Our capex method counts most of the roughly $300 million a year spent on repowering and new projects as ongoing cost, which is conservative. Why 2025 fell. Owner earnings dropped about 25% in 2025. Operating cash flow was reduced by about $63 million to buy out the Mt. Storm wind commodity hedge before that plant was sold to the sponsor for repowering, and cash interest rose (interest expense was $387 million against $307 million in 2024). Because the buyout does not recur, our first-year assumption is a return to the $2.65 anchor rather than a further decline. The first half of 2026 supports this: operating cash flow was $615 million against $286 million in the first half of 2025, with revenue up about 21%. We do not raise the anchor on that, since a half year is seasonal and short. Base case, about $28 per share. Owner earnings stay at $2.65 for 12 years, then fade to zero over the following 13 years. Twelve years is the weighted average remaining life of the renewable power sales agreements, according to the 2025 annual report. The spending we deduct each year (repowering wind farms such as Mt. Storm and Goat Mountain, adding batteries) is what keeps the fleet earning past the current contracts, so flat earnings is a fair reading. We credit no growth: drop-down purchases from the sponsor depend on new deals and on funding that has not yet been raised, and are not counted. Bear case, about $15 per share. The company is heavily indebted, and interest costs rose sharply in 2025; a further $2.7 billion-plus green bond programme, including 2034 notes issued in January 2026, keeps interest high. The Marsh Landing plant's capacity contracts run off between 2026 and 2030, and 2025 showed lower output at the gas plants and some wind sites. We assume owner earnings of $1.75 for 8 years, then a fade to zero over 10 years. Bull case, about $38 per share. The projects already announced and funded by tax-equity and sponsor partners (the Deriva Solar portfolio of 613 MW, the Mt. Storm and Goat Mountain repowerings, and new battery projects due 2026-2027) deliver, lifting owner earnings from $2.65 to $3.30 over four years, held flat until year 15 and then fading to zero by year 30. This mirrors the 2020-2022 rise in owner earnings, which came from similar acquisitions. What could make this wrong. The share of cash that belongs to outside tax-equity partners is netted in financing activities and could not be separated from the cash flow figures, so our per-share number may run somewhat high. Customer concentration is a risk: Southern California Edison accounted for about 15% of the Renewables & Storage segment's revenue. We also could not verify the number of sponsor-held units before 2023 from the filings and estimated it at about 85 million.